The Supreme Council of Urban Planning and Architecture, as the highest authority for land-use policy and urban development regulation, plays a crucial role in shaping patterns of urban growth through determining land uses, construction boundaries, and density regulations. The aim of this study is to examine which components within the Council’s missions, position, and structure require reconsideration in order to enhance its effectiveness in promoting the public interest within the urban governance system. From a paradigmatic perspective, the study is situated within an interpretive–critical framework. Methodologically, it is a qualitative study, and in terms of purpose, it follows a problem-oriented, explanatory–analytical approach. The reasoning logic of the research is based on deductive, inductive, and interrogative approaches. Data were collected through in-depth semi-structured interviews with experts and stakeholders, as well as document and policy analysis, and were analyzed using thematic analysis through coding, categorization, and theme extraction. Purposeful sampling was employed, and theoretical saturation was reached at the twelfth interview. The findings indicate that the gap between the Council’s mandates and its accountability mechanisms, within an institutional structuralist framework, has led to the emergence of conflicts of interest among members and participating institutions. Within the context of positive feedback loops and path dependence, these conflicts have contributed to the consolidation of sectoral and divergent decision-making patterns, ultimately weakening the alignment of decisions with the public interest and public rights. The consequence of this situation is the persistence of inefficient urban development patterns and increasing pressure on the land market. Accordingly, the results emphasize the necessity of institutional restructuring and strengthening conflict-of-interest control mechanisms in order to break reinforcing feedback cycles.