The city of Shenzhen has issued draft guidelines to aimed at increasing the supply of rental properties in Chinas high tech hub.
Land plots will be set aside for builders and existing building will be renovated to make them suitable for rental homes, the housing authorities said on its website on Monday.
The city will also gradually grant tenants and homeowners equal rights to public services including access to residential permits and education.
The move comes as a wave of real estate buying in Chinas biggest cities has pushed up prices, prompting local authorities to take steps to rein in the market.
The Shenzhen government also said it will strengthen supervision on rental income and deposits collected by home leasing companies to prevent financial risks from the misuse of funds or illegal withholding of deposits by those platforms.
Separately, Beijing on Tuesday also said it will impose tighter regulations on home leasing firms, in a bid to curb financial risks in the sector following a slew of forced evictions due to financial distress.
In December, Chinas top leaders vowed to focus on the development of rental housing markets to help solve a housing problem in big cities, where home prices remain elevated.
Reporting by Lusha Zhang and Ryan Woo; Editing by Ana Nicolaci da Costa Simon CameronMoore