A reference to building a new city is worthy of inclusion here. So, a recap from Dredbanger's thread at the Tavern's Side Room, along with some other observations and stratagems from here are added, to achieve a synthesis. Many thanks to Bizpro as well. I believe it is fairly complete; please feel free to add corrections or additional information.
The Art of City Building
After you are elected Lord Mayor, the Alderman will offer you various tasks. One of the most rewarding is building a new city, where you will have exclusive control and in essence be Lord Mayor in perpetuity. When you go to the Alderman's city, check the town hall, Alderman's office. If there is a shortage of goods anywhere in the Hanse of any great extent, one offering will be a new city. If there is a very significant shortage of multiple goods, then two different cities will be offered. There will be up to three efficient goods produced in the new town. The programming however is rather interesting. Instead of getting hunter lodges if you are short of furs, then timber is offered. The shortage good, alphabetically in German generates an offer of the next item. A list of which good when short generates which good, in English, follows:
Beer-IG
Ore-wool
IG-honey
Skins (furs)-fish
Timber – cloth
Honey – grain
Pottery – bricks
Salt – ore
Whale oil – grain + import of furs
Wine – pottery
Wool – wine
Fish – beer
Hemp – whale oil + fish
Pitch – hemp
Grain – meat/leather
Spice – no effect
Cloth – salt
Bricks – pitch
Meat/leather - timber
Generating an artificial shortage is possible, to manipulate the good you desire; or, you may build and supply more of one of the shortage goods to trigger a different production item. So, beer shortage will generate iron goods workshops to be offered. To achieve this, buy as much as possible of the beer in all the markets, but load it aboard ships rather than your trade office. The game still senses it in the trade office, but not in ships at anchor. Needless to say, a bit of saving/reloading may be necessary. Goods are also prioritized, some shortages are more concerning than others in the Hanse. It is just about instantaneous in how it changes from say, sawmills to weaving mills. If all goods are present in markets at decent amounts, there will be no new town mission offered.
Now you are ready to begin.
When you first arrive in your new city there is nothing more than a few roads and perhaps a fence where a church should be, with a few people wandering about. None will talk to you. First item of business is to build the Market Hall. Immediately after the building is placed, you may then place your trade office. Don't bother with putting any goods at all in the city, just keep them in your trade office. You cannot sell them for any cash, and moved to the city from your trading office, the goods disappear. And, the residents don't care at all. You don't need to build warehouses, either.
If you have timber as one of your choices (a given early on, since there usually aren't a lot of furs in all cities) for production, build a few sawmills to start. At the same time build three half timber houses. Don't bother with building any gable or merchant houses. Three half timbers are sufficient to house your population. The population will only grow to 500 maximum for a while, and they will work in your businesses regardless of housing availability. 30 workers represent 120 people, so four sawmills will employ enough for 480 people, and five can be it for a while. For a very advanced player who practices manipulation "Turkish Style" of buildings for dense packing, this can be set up from the beginning, and six sawmills accordingly placed. Sawmills save on transportation costs. Interestingly enough, the timber is all produced free. The town pays no rent, charges no labor, and, as mentioned, doesn't need any goods until it is recognized. But it will give you free goods.
Next on the building list, in order, is the Town Hall. Set the taxes at whatever you like inside. There is no vote, but extra cash may or may not come in handy. After you have placed it (and it doesn't need to be constructed, either) come the Weaponsmith and then the Armoury. After the Armory is placed, you may begin construction on your walls.
The city population is frozen at a maximum of five hundred until the town wall is frameworked. After the framework is fully laid, the population will begin to rise past five hundred. You still do not need to put anything into the town as far as goods go, but you will most likely need to donate some cash to the city coffers to build the wall. Not enough taxes come in rapidly enough to pay for it all. Now, as soon as you are past the first gate, you do have the option to trade with the local Prince, much like your hometown.
When the population supports it, you may add another business, and half timbers as required. The population steadily grows. If you desire a faster growth to 500, or past 500 once the wall is up, sailors can be transferred to a ship in the harbor and fired, adding to the population. I did not bother with this, just took advantage of normal construction lags.
After the town wall framework is up, you will have options for additional city buildings. The Repair dock (no shipyard) and Tavern are offered simultaneously, unlike the other city buildings. The Tavern will have one, sometimes two, captains present. After these are frameworked, the Church is offered. There is no beggar option in it.
Construction materials and costs, exclusive of businesses, trade office and housing:
54 pieces of wall = 540 bricks 54 timber 54 Iron goods and 70632 gold
3 gates = 75 bricks 6 timber 6 iron goods and 9046 gold
Totals: 615 bricks 60 timber 60 iron goods and 79678 gold
All municipal buildings ( townhall etc. )
435 bricks, 210 timber, 200 Iron goods 50 hemp and 35000 gold. The breakdown, bricks-timber-iron goods-hemp-gold, including unneeded merchant houses, gabled, warehouses (but you will need come official recognition):
Markethall 50 20 20 - 4000
Townhall 80 50 50 - 8000 ( enables give money to city, Levy extra tax, and change tax rates)
Weaponsmith 50 20 20 - 4000 ( enables building of ship and handweapons )
Armoury 50 20 20 - 4000 ( enables guards recruitement and Townwall development )
Trade office 50 20 20 - 13000 ( enables all standard buildings, houses and production facilities)
Half Timbered House 25 2 2 - 5000
Gabled House 40 10 10 - 8000 (for later)
Merchants House 50 20 20 - 8000 (for later)
Warehouse 40 20 20 - 10000 (if ever desired)
Town wall 10 1 1 - 1308
Town gate 25 2 2 - 3016
Tavern 50 20 20 - 4000 (I don't know if it happens very often but one player got 2 Captains instantly, one is the usual I think)
Repairdock 75 30 20 50 3000
Church 80 50 50 - 8000
Port Bombards 20 20 20 - 8711
Gate Bombards 20 20 20 - 8711
Businesses and housing cost the same, need the same materials as elsewhere.
As the wall nears completion, you will need to be prepared for Recognition Day. This is when the "you know what" hits the fan. Once the city is recognized (it needs 1000 population minimum and a complete wall) you will have to supply it all goods, beer to wool. The population will immediately become unhappy if there are no town guards, no wall defenses, no harbor defenses. Interestingly enough, you can post an outrigger immediately after the town hall is up, and be paid for it.
So, other defense needs to have available for Recognition Day:
5 gate bombards = 100 bricks 100 timber 100 iron goods and 43555 gold
2 port bombards = 40 bricks 40 timber 40 iron goods and 17422 gold
For your military, you will need to import the weapons from your own town because the Weaponsmith doesn't produce the weapons at a nice speed, nor does he have room for the weapons, he'll produce a sword and a bow, and then he's at capacity. Two maximum. Plus, you have to put the goods such as leather, timber, iron goods into the Market manually, and it will disappear, and it will cost you more in the long run. Best to either: 1. Move the swords, bows, crossbows and muskets from your hometown, or, 2. Buy them from another town's Weaponsdealer (the Weaponsmith in his sneaky criminal mode). You will need at least miminal town guard to please your city.
Strategy also enters into city building. You have up to two years for completion, which is when the last section of the wall is finished (and you have a thousand or more inhabitants). Until then, the city is a monopoly (the AI will build sometimes after completion, never before). So, examine your options and determine what is most valuable to you. It takes me about six months to build a city, keeping the construction crews occupied, from start of the Market Hall to Recognition Day. There is money to be made upon completion by the sale of the needed goods to the city. You can also then begin other tasks, such as Pirate Nests or even build another new city. But there is another side to the coin as well. Remember, all the goods produced by your businesses in the city are free. Perhaps you wish to delay completion, build twenty or thirty industries and lots of housing, roads, wells, a school, etc, and take advantage of goods production at no cost for a year. Furs by the shipload can earn you quite a bit in cash. And a whole year's production can add up to quite a sum. Spinning straw into gold, or wool into cloth at no added cost, can add a lot to your bottom line. Remember though, industries like fisheries still require hemp and salt, hunter lodges still require iron goods and hemp, workshops timber, pig iron, etc, in your trade office.
A few last items of note: Your city is safe from attack until it is completed. No angry Prince or Marauding Horde will come to call. Also, the second and third wall cannot be started until the last section of the first wall is constructed, unlike a normal town. The way locations of new towns are selected isn't totally understood yet. Even with a save, if you haven't accepted it, reload may show a different town, or if two are offered, one may disappear. In one experiment, after a pirate nest was destroyed, it became a new town site. In another, after a pirate nest mission, a different town altogether was offered.