Deriving 3D urban development patterns is necessary for urban planners to control the future directions of 3D urban growth considering the availability of infrastructure or being prepared for fundamental infrastructure. Urban metrics have been used so far for quantification of landscape and land-use change. However, these studies focus on the horizontal development of urban form. Therefore, questions remain about 3D growth patterns. Both 3D data and appropriate 3D metrics are fundamentally required for vertical development pattern extraction. Airborne light detection and ranging (Lidar) as an advanced remote-sensing technology provides 3D data required for such studies. Processing of airborne lidar to extract buildings’ heights above a footprint is a major task and current automatic algorithms fail to extract such information on vast urban areas especially in hilly sites. This research focuses on proposing new methods of extraction of ground points in hilly urban areas using autocorrelation-based algorithms. The ground points then would be used for digital elevation model generation and elimination of ground elevation from classified buildings points elevation. Technical novelties in our experimentation lie in choosing a different window direction and also contour lines for the slant area, and applying moving windows and iterating non-ground extraction. The results are validated through calculation of skewness and kurtosis values. The results show that changing the shape of windows and their direction to be narrow long squares parallel to the ground contour lines, respectively, improves the results of classification in slant areas. Four parameters, namely window size, window shape, window direction and cell size are empirically chosen in order to improve initial digital elevation model (DEM) creation, enhancement of the initial DEM, classification of non-ground points and final creation of a normalised digital surface model (NDSM). The results of these enhanced algorithms are robust for generating reliable DEMs and separation of ground and non-ground points in slant urban scenes as evidenced by the results of skewness and kurtosis. Offering the possibility of monitoring urban growth over time with higher accuracy and more reliable information, this work could contribute in drawing the future directions of 3D urban growth for a smarter urban growth in the Smart Cities paradigm.