This study examines the challenges arising from insufficient coordination among the municipality, the city council, and other relevant institutions, including governmental agencies, which have led to delays in the implementation of urban development plans. Conflicts of interest among institutions and weaknesses in executive decision-making have further exacerbated these challenges. In addition, legal and regulatory issues—such as complexities related to land acquisition, lack of transparency in urban development regulations, and the frequent amendment of such laws—constitute other significant barriers to urban development. The objective of this research is to evaluate building density criteria within urban development plans, with an emphasis on development capacities and the balance between socio-economic components in District 9 of Mashhad. Sustainable and balanced urban development, as one of the key challenges of urban management in metropolitan areas, requires policy frameworks that simultaneously address economic and social needs. Accordingly, this study employs a grounded theory approach. Data were collected through semi-structured interviews with urban experts, local managers, and residents, and were subsequently coded systematically. Key concepts and core categories were extracted and analyzed. The findings indicate that criteria such as the equitable distribution of building density, access to urban infrastructure, social equity, and economic efficiency are among the key factors influencing sustainable development in District 9 of Mashhad. Moreover, imbalances between social and economic components can lead to increased inequalities, reduced quality of life, and the intensification of environmental problems. These findings underscore the necessity of formulating comprehensive and integrated urban development policies capable of achieving a balanced alignment among social, economic, and environmental dimensions.