This seems like a trojan horse to blow away the EPA and Endangered Species Act entirely.
If EPA says you can't build a dam or otherwise alter the watershed that overlaps your land, they have a clear rationale for that regulation that goes beyond "protecting the charm and character" of a particular neighborhood.
Just overturning the decision that says occupancy density is itself a police power would be narrow enough to ease building restrictions while not blowing the EPA away.
I can't think of any instance where the endangered species act would allow housing in some area near wildlife, but only if it didn't have a dividing wall between living spaces.
Same with the EPA.
Zoning is almost entirely set at the local level.