I myself had one idea, let the max level of the city control the types of building that can be built.
i.e, an outpost cannot support good-quality housing, nor can it support anything more than rudimentary military or resource gathering
Level 2 adds things like elder council, market, grannaries, inn etc
Level 3 adds schools, libraries, mills etc
Level 4 adds theatres, restaurants, universities, mansions, bakeries
Level 5 adds tower of sorcery, bazaars, etc
The better buildings only become available as the city increases in status and gains the logistics necessary to support large institutions like towers of sorcery. However anything better than tier 1 still grows over time, although the population growth rate would be lower in cities at lower tiers of prestige, and there would be a maximum, but