Residential density is a pivotal factor in the success of Transit-Oriented Developments (TODs). Conventionally, residential density has been measured based on the number of dwellings per unit area in “Catchment Areas” (CAs). However, this method exhibits limitations in precision, as the size of dwellings can vary significantly, impacting the potential inhabitant count. In this study, the concept of “Residential Capacity” is introduced, which assesses the number of bedrooms within a specified area, offering a more accurate estimation of the minimum and maximum population range in CAs. Using the urban environment around Tikkurila train station as a case study, residential capacity is calculated within the standard 10-min walking radius from the station but employing a realistic pedestrian catchment area measured through isochrones. The results provide a foundation for comparisons in future studies, establishing a residential capacity threshold that could serve as an indicator of urban sustainability for planners during the TOD design phase.