Since a lot of the buildings in the base kingdom rules (not to mention the additional ones people have devised) have very little to differentiate them, and often there's a clearly superior choice. For instance, the Smith, Mill, and Tannery all cost 6 BP, give +1 Economy and +1 Stability, and take up one block. But the Tannery and Mill both have placement restrictions, while the Smith doesn't. Meanwhile, a Granary provides +1 Loyalty and +1 Stability, the same bonuses as a brewery, but costs twice as much.
One solution is to make house rules about the number of each type of building that can be built in a district or a city, or to make it a plot point if they build some weird mix. ("City full of graveyards? A high-level necromancer moves in and takes it over. You lose the hex until you kill him.") However, the solution I'm considering designing would tie each city in with the Gamemastery Guide's settlement stat blocks.
Each building would then have some effect on its settlements' stats, in addition to the effect it has on the kingdom. The Smith might give +1 settlement-Economy in addition to the kingdom economy & stability bonuses, while the tannery might give +2, and the mill +1 s-economy and s-society (better bread = more culture?). The Granary might increase s-economy, while the brewery increases s-economy and crime. Obviously, the buildings couldn't directly give +1 or 2 to a settlement stat, or you'd quickly end up with cities with ridiculous modifiers ("In our city, the corruption is so high that even the most blatant liar can tell a guard that he's a four-headed undead troll in disguise as the guard's long lost brother and be believed." ) Maybe divide by 4, so +/- .25 as a basic change, and going up from there.
I'd also want to tie the settlement size to the buildings that were built, either number of buildings, or have a Growth value for some buildings (city sizes up at X number of growth points), or just base it on the base value of the buildings that are actually built (which would bean that a settlement which has nothing but an alchemist and an adjacent house in it would be considered a small town, while a settlement with 5 smiths, 2 theaters, a cathedral and an arena would still be a thorp).
Doing this would also let the PCs choose what type of government to allow/enforce in any given city - do they appoint a council, or put one guy in charge? Do they let the mages from the recently-built caster's tower take over? It'd also give you a good way to bring in the settlement qualities (chosen by the GM whenever a city grows based on events and buildings built), which could, in turn, provide some flavor to each city to keep them from being "Forest City #3".
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Has anyone worked on something like this before? Does anyone see problems with it? Suggestions?