User blog comment:Harold Burned-Mane/The Truth about Ulfric Stormcloak/@comment-1600847-20131003203359/@comment-17114085-20131004021317

That is the issue with much of the in-game lore, its not specific. This leaves open many possibilities, which is a pain when debating over such things. I still think it refers to the dunmer in Skyrim aswell (it would explain alot) but like you said it's not specific so it could go both ways.

Yes the argonians would like to be able to live inside the city, no one ever wants to live in a slums, but as long as they stay in Windhelm they have to live in the assemblage. But like i said they do want to stay in Windhelm (likely because of their jobs in the docks), they could just as easily go down to Riften (there probably isn't any job openings as there are already argonian dock workers there).

Talos guide you-Harold Burned-Mane