Check this out:

https://forums.elementalgame.com/393849

It's quite possible that some other town that became too close, blocked your capital from being able to build anything on free tiles (if those are 4 or less tiles away from other city borders).

Also, wooded areas are of limits for buildings.

Nice to know that. Somehow I cant locate where such informations are to be found. I did eventually guess that I had reach a limit of numbr of buildings and teared some less important buildings apart to build others..

I hope the saver game helps.

Ok, I checked the save, and it's exactly the problem I was talking about.

City at north, due to resources linking to city walls expanded so much southwards that all buildable tiles for city at south now fall into less then 5 tiles into distance from the northern city. And, as game rule, you can't build buildings on tiles that are less then 5 tiles away from other city (counting from closest city wall). That's also why even destroying buildings in southern city won't free place for new buildings.

To demonstrate the issue, destroy south lost library, and you will be able to build things in other city, but only in locations at south. Destroy gold mine too, and you'll get more tiles free.

P.S.

And yes, whole system sucks.