I was playing around with the City designer and apparently the outside of cities counts as buildings or something, is this a faulty part f the city designer (which I highly doubt) or a purposely coded part of the game. makes for a big annoyance.
The outer ring of grass (or whatever terrain type you're working on) cannot be constructed on, including roads. So if you're trying to have one of your two sides of roads there, it will fail the validity check.
"May the Grace of Ara go with you, and His Vengeance be wrought upon your enemies."