Urban areas have experienced exponential growth since the industrial revolution and by virtue, the urban population has followed. Current projections suggest that this growth has yet to reach its peak implying that urban developments will continue to sprawl into untouched territories. This growth and subsequent sprawl will undoubtedly come at the expense of forested areas. This study presents a Carbon Storage Factor indicator for new urban developments. It is a novel concept which integrates urban planning, land use changes and wooden construction. The factor sets a carbon storage requirement for new urban areas that are developed at the expense of forested areas. The study is conducted in four parts. First, we estimate the carbon storage potential of forest areas via existing literature and databases. Then we collect all new development and construction estimates up to the year 2050 for the whole metropolitan region in Finland. Next, we conduct scenario analyses for different demand levels of wood in projected residential developments. Finally, we compare the carbon storage potential of the future building stock to the forest areas planned for development. The data used is provided by the regional authority. The results detail that the future residential building stock can store between 128–733 kt of carbon. The lower level implies that current construction methods can only partially preserve the carbon storage of an area in buildings. However, the higher level suggests future buildings to be able to exceed the carbon storage potential of forest areas by nearly 47 tC/ha. The study reminds that an increased use of wood is dependent on sustainable forest management practices. Furthermore, it is not our purpose to promote urban development into entirely new areas but rather encourage urban planners to consider the carbon balance when it is the only viable option.