China is set to stop construction of public rental houses and renovate 6 million run-down urban houses in 2016.
The program is a crucial way of providing low-income urban residents with affordable housing.
Minister of Housing and Urban-Rural Development Chen Zhenggao says China will acquire houses through the market and offer allowances to tenants.
"We will no longer build public rental houses, which will help the development of the rental housing market, reduce housing inventories, reduce government direct investment, relieving government administration pressure, and help establish a new housing security system."
China had a target of renovating 5.8 million homes in 2015, completing the vast majority of that task in the first 10 months of the year.
The aim is to complete the renewal of all run-down urban areas and dilapidated housing by 2020.
The ministry has also pledged that China will improve control of the property market, and encourage real estate companies to merge and restructure.
