It looks like your bus stop is on the city's central tile - the tile directly under the city name. This tile is the city's "seed tile" - the city grows grows outwards from there. When a player-owned building such as a bus stop, train station etc is placed on the seed tile, the city is unable to spawn new buildings and will slowly die off.
Try moving the bus stop to an adjacent square and see if the city starts to regrow again.