I read this, and see a utopia. History can be a wonderful tool for exploring the attempts humanity has endured in the pursuit of utopia. My first thought, is the pursuit of Communism by Lenin, followed by Stalin. I say this not to demonize a political system, but to illustrate a potential avenue for you to explore. It may also be a good point of reference, as you are citing issues prevalent in 21st century America. A look at other nations, and at history may get that creative spark going.
The author, Ayn Rand, born Alisa Zinov'yevna Rosenbaum in 1905, had lived through the establishment of Communism in her country, and later managed to immigrate to America. Her novels explore the dangers, as she saw them, in America migrating from a Democratic Republic, to a Communist system via selflessism, or as she viewed it, the use of guilt to deprive one who is successful, in order to supply one who is not, or chooses to remain idle. Instead, she preaches the virtues of selfishness, and throughout her life, maintained that selfishness as she meant, was not as it is defined.
Igor Gouzenko was an author and defector, known for the book, The Fall of a Titan, which depicts a Soviet man and his life, in the height of Soviet Russia. Igor Gouzenko had the unique perspective of having lived through the era, and policies of Stalin's Russia.
These two authors paint a wonderfully rich image of Communism, it's policies, it's ideals, and the real effect that it had on the people, and in doing so, provide an equally rich avenue for you to explore in terms of potential conflict. Not just from within the constraints of your Elfen and Human city, but from outside sources as well.
The history of Fascist Germany and Italy may serve many useful as well.
Closer to home, and on the topic of racism, or what may be in your case, speciesism, the topic of war makes a lot of room for controversy. Consider how African American soldiers were treated during the Civil War, WWI and WWII, or how Native Americans were viewed during WWII. Consider how many Japanese Americans were relocated in what equated to American concentration camps during WWII, and how many ended up losing their homes in the process. Further, consider how the Japanese Americans who enlisted into the military during WWII were treated, in comparison to the Native American "Wind Talkers" and what their return from war may have been like. Ira Hayes would be one example. These bring up a wealth of social controversies (on both sides of the table) that don't necessarily have to stem from war.
I think if you look to American history, and to the history of other nations, you will find a veritable cornucopia of useful controversy that you can use.