Avoiding urban sprawl and increasing density are often considered as effective means to mitigate climate change through urban planning. However, there have been rapid technological changes in the fields of housing energy and private driving, and the development is continuing. In this study, we analyze the carbon footprints of the residents living in new housing in different urban forms in Finland. We compare the new housing to existing housing stock. In all areas, the emissions from housing energy were significantly lower in new buildings. However, in the inner urban areas the high level of consumption, mostly due to higher affluence, reverse the gains of energy efficient new housing. The smallest carbon footprints were found in newly built outer and peri-urban areas, also when income level differences were taken into account. Rather than strengthening the juxtaposition of urban and suburban areas, we suggest that it would be smarter to recognize the strengths and weaknesses of both modes of living and develop a more systemic strategy that would result in greater sustainability in both areas. Since such strategy does not exist yet, it should be researched and practically developed. It would be beneficial to focus on area specific mitigation measures.