This paper aims to reveal the shortcomings of the land use efficiency assessment formula presented in SDG 11.3.1 Indicator and develop a framework that can provide urban planners with a more accurate understanding of the variables influencing and/or influenced by urban expansion. Based on the mentioned formula, Tehran never experienced urban shrinkage between 1986 and 2021, as shown by the relationship between land consumption and population growth. However, the research findings indicate that land allocation patterns have not only decreased most urban services per capita, but have also undermined ecosystem services during this period. In this paper, we propose a new assessment framework by which a dual aspect of urban planning is addressed, namely providing sustainable urban services while protecting natural resources, and using ecosystem services sustainably to support cost–beneficial urbanization. For this purpose, a total of ten mainly repeated contributing variables were collected in the categories of environmental, physical-spatial, and economic–social effects of urban expansion. A questionnaire based on these variables was prepared, and 14 urban planning experts collaborated to classify the variables and identify causal relationships between them. In the following, data obtained from the questionnaires were analyzed using DEMATEL and Interpretive Structural Modeling (ISM) methods to determine which variables influence and/or are influenced by urban expansion (and to what extent). Third-level variables that directly influence urban expansion include transportation (A6), infill development (A7), and entrepreneurship (A10). Spatial justice (A8) and housing and population attraction (A9) were identified as middle-level variables that both affect and are affected by urban expansion. Finally, land surface temperature (A1), air pollution (A2), sewage and waste (A3), water resources (A4), and vegetation (A5) were identified as first-level variables that are mainly affected by urban expansion.