Shanghai's new urban master plan proposes the development of more sustainable and affordable residential properties for the middle class and more optimized use of land, as the supply available for development declines.

The plan said that 3,200 square kilometers of land will be developed by 2040, with more efforts to make full use of underground spaces, reduce industrial land and secure land for public facilities and green belts, according to a circular from Shanghai's municipal government.

Zhuang Shaoqin, head of the Shanghai Municipal Bureau of Land and Resources, said that under the master plan Shanghai will see a housing system that is affordable and sustainable, targeting the middle class and regular apartments.

More small and medium-size apartments will be built, and more rental properties will be offered to meet the demands of people coming into the city.

"The plan means that more public facilities such as gardens, libraries, open areas for entertainment and leisure will be offered to the general public to enhance their standard of living. Developers will be encouraged to build more projects for families who work and live in the city instead of developing more luxurious, spacious properties that only target a small number of wealthy people. Overall, the plan tries to add glamour to the city and enhance its livability," said Zhu Qi, an analyst at Shanghai Tongshen Property.

Wang Yueyang contributed to this story.