I think there is a bit to unpack in your question, starting with the definition of terms. Just starting off with the title question, yes - examples include the 1948 Donora Smog event, and the 2006 Delhi Smog event. The use of the word disaster is usually reserved for catastrophes, not exceedances.
There are a couple of problems with just claiming that something is an environmental disaster. For one, there is the political problem. Claiming that the city is an environmental disaster could be a concession of defeat. This also could ward off prospective inhabitants or cause the diversion of other funds. The double decker buses are also public transit, and may produce less pollution as compared to individual cars.
There is also a siting issue. Usually those regulations are applied to sites that are representative of the area at large. The distance from the source is an important consideration when looking at measurements of atmospheric chemicals. Individual sites may exceed the limit, but does the average of the sites exceed the limit? There is also a question of by what extent is the limit exceeded or why is the limit exceeded? Is it exceeded for an hourly limit, 24 hour averaged limit, or an 8-hour average limit? Sometimes, it is not unheard of to exceed the limit, but the people who set these limits set them more as goals- goals that keep getting pushed back as more places achieve them. When was the limit last changed?
Here are a few questions that you might want to be prepared to answer if you bring this issue to council, based on how this question is phrased:
- How many people have died as a result of inaction? What evidence do you have of this increase in premature death? This is probably the biggest gauge for yourself whether or not this issue is exaggerated.
- Why does your governmental environmental agency seem less concerned than you are? Presumably, your governmental environmental agency's job is to monitor and reduce pollution. If your city council isn't being pushed by the governmental agency, perhaps there is more at work than what is being let on. Perhaps there is corruption, or perhaps the council's hands are tied.
- What reasonable solutions do you propose? And what public funds should be diverted to pay for those solutions? It is good to be idealistic, but every thing comes with a cost. Are people willing to pay that cost?
- Have you consulted an engineer to identify alternative structures that could provide for a similar number of housing units for a similar price? Usually the places built in areas with high pollution are more affordable, and the shape of the structures are meant to accommodate more people. Are you willing to be accused of promoting gentrification?
- How much does the pollution vary due to factors outside of the control of the city? Is the pollution being reported consistently, or is it heavily dependent on anomalous traffic patterns (holidays, sporting events) and weather?