General and mathematically transparent models of urban growth have so far suffered from a lack in microscopic realism. Physical models that have been used for this purpose, i.e., diffusion-limited aggregation, dielectric breakdown models, and correlated percolation all have microscopic dynamics for which analogies with urban growth appear stretched. Based on a Markov random field formulation we have developed a model that is capable of reproducing a variety of important characteristic urban morphologies and that has realistic microscopic dynamics. The results presented in this paper are particularly important in relation to “urban sprawl,” an important aspect of which is aggressively spreading low-density land uses. This type of growth is increasingly causing environmental, social, and economical problems around the world. The microdynamics of our model, or its “first principles,” can be mapped to human decisions and motivations and thus potentially also to policies and regulations. We measure statistical properties of macrostates generated by the urban growth mechanism that we propose, and we compare these to empirical measurements as well as to results from other models. To showcase the open-endedness of the model and to thereby relate our work to applied urban planning we have also included a simulated city consisting of a large number of land use classes in which also topographical data have been used.