Cool design, very clean. I'm far from qualified to tell you what should be fixed but here is an idea i had. In the top left of the city, is the jagged line representing a cliff? (I assumed so because of the small drawing next to it) If so, first, well done adding the small sketch to represent that, it's a nice addition, second maybe your "design flaw" could just be increasing the size the cliff has taken of the city, you could move it in considerably, since this is the oldest city on the continent, it could be assumed that the cliff would continue erode and take a larger part of the city, and then the poor people of the city could be forced to live closer to the edge of the cliff, creating a slums area.

Anyway I like the design so far and can't wait to see further progress

Jason