They were right in the middle of city parks and planters. The NPCs must have either been very unobservant or their moms told them not to go in because Villains always made their lairs there. After the heroes cleared one out, the city never secured it. and more villains moved right in.
Further the cave system was so massive that any earthquake would have sunk the city beneath the waves.
If we are going to have something like that here...I want dwarves and the mines of Moria. AND the Balrog!
Rip Van Winkle shows that dwarves are an immersive part of the region's culture.
"Thorin gave Captain Bilbo a mithil coat."
"That was a kingly gift!"
"I never had the heart to tell him, but it's worth was greater than Astoria."