Urban sensing systems that use mobile phones enable individuals and communities to collect and share data with unprecedented speed, accuracy and granularity. But employing mobile handsets as sensor nodes poses new challenges for privacy, data security, and ethics. To address these challenges, CENS is developing design principles based upon understanding privacy regulation as a participatory process. This paper briefly reviews related literature and introduces the concept of participatory privacy regulation. PPR reframes negotiations of social context as an important part of participation in sensing-supported research. It engages participants in ethical decision-making and the meaningful negotiation of personal boundaries and identities. We use PPR to establish a set of design principles based on our application drivers.