The Shanghai city government is considering increasing plot ratios for selected urban redevelopment projects to encourage private sector participation to speed up the upgrading of rundown areas.

A plot ratio of 2.5 times is allowed for residential projects in central locations, but sources said the municipal government was formulating an idea to raise the ceiling to 3.5 times.

The plot ratio - the maximum potential gross built floor areas to land area - is a measure of development intensity. A higher ratio means developers can build bigger projects, resulting in higher earnings.

South China Morning Post