The intensive utilization of residential space is crucial to the transition to a carbon-neutral residential sector, although it has received limited attention in the literature. We develop a methodology to estimate the volume of unused housing in urban China, defined as dwelling units built and sold for at least two years but never occupied. By early 2021, 17.4% of the housing stock built in China during the first two decades of this century remained unused. The construction and operation of unused housing produce 55.81 million tons of carbon dioxide annually at the national level, accounting for 6.9% of the Chinese residential sector’s carbon emissions or 26.5% of the carbon emission reductions achieved by China’s primary ongoing residential decarbonization efforts. Cutting down the volume of unused dwelling units can contribute significantly to China’s decarbonization in 2021–2030. The authors estimate, by early 2021, 17.4% of the housing stock built in urban China in 2001–2018 remained unused. Cutting down the volume of unused dwelling units can contribute substantially to China’s further decarbonization.