Just a suggestion which maybe it could be considered...

Ya know how when you conquer an enemy city you get a conquest penalty and all, and naturally the other option to raze the city leaves that ground infertile, thus you either gotta deal with the penalty or nothing at all. Perhaps we can maybe look into an additional option. 

So while there is an option to restore ruined ground in time through your Sov, I was thinking perhaps we can throw in another option that a few classic series like Age of Wonders for example have done in the past. The "migrate" option... Basically, give an option to migrate your home race into the city, it would take a few/several turns (whatever you guys think is good for balance) for it to process, but after it should be reduced conquest penalty. The other option could be to use that same option but instead of giving it as a building process, instead make it part of the design, so the city slowly migrates your own people and as a result reduces the conquest penalty over time and all.

Anyhow it's just a though and hopefully worth a consideration, or perhaps can be refined based around this concept of migration. 

thanks,