Background and objectives: Hawassa served as the country’s southern region’s capital from 1990 to 2019 and is currently experiencing rapid urbanization. Urban planners use the physical and socioeconomic driving elements of Land Use Land Cover Change (LULCC) to identify the variables influencing the trend of urbanization and then make appropriate plans.Methods: The study primarily employed advanced technologies like Geographic Information Systems and Remote Sensing to collect and analyze accurate and reliable information. The data were collected through questionnaires, interviews, and key interviews. Finally, the data were analyzed in different ways, using figures and tables, for example. Descriptive and econometric models were also used to analyze the data and probit regression models were used to investigate the impact of urban expansion on the livelihood of displaced farmers in the surrounding area.Findings: Multivariate analysis of variance indicated that the effect of urban expansion on the combined dependent variables, namely, on land use, socioeconomic activities, culture, and environmental change, is statistically significant F(8, 616) =12.704, p = 0.000, Wilk’s Lambda (λ) = .737, partial eta squared(partial η2) = 0.142, observed power = 1.000. Comparatively, the area covered by farmland, built-up areas, and bushland increased from 19.46% to 26.51%, 11.97% to 18.71%, and 3.07% to 4.51%, respectively. The mean score for the level of social relationship and values after land expropriation was 1.7 moderate, with a standard deviation of 0.852 in comparison with the mean score for the level of social relationship and values before land expropriation, which was 3.21 high, with a standard deviation of 0.79. This shows that the land expropriation program negatively affected farmers’ social relationships and values; their social relations levels were high before displacement and between low and moderate after displacement.Conclusion: Policy and strategy gaps in the urban expansion program and this policy issue have hindered the growth of the city and resulted in a serious issue regarding good governance in the area.