URUMQI - Authorities in Urumqi, capital of Xinjiang Uygur autonomous region in Northwest China, are working to build new homes for tens of thousands of low-income residents living in the city's shantytowns.

Under the renovation project, the municipal government would invest 5 billion yuan ($793.6 million) this year to demolish old houses and relocate 10,000 families, Jerla Isamudinhe, mayor of Urumqi, told a meeting of the local legislative body on Thursday.

"In the next five years, we will strive to build more low-income housing units to improve the livelihoods of local residents," he said.

According to the plan, the government will build new homes for 60,000 families in the shantytowns by 2015.

The shantytowns -- known for poor construction, shabby conditions and filth -- in downtown Urumqi have existed for several decades, with the oldest house dating back to the 1930s. The areas have gathered people of different ethnic groups including Han, Uygur, Hui, Kazak, Mongolian, Russian and others.