Regarding housing:

Have you considered allowing for any house interior to be expanded to a larger size?

For example, say you buy a Small house. The exterior is Small, forever. But if you were to pay a very high fee, the interior would become not Small but Medium or Large. Even people who have just an apartment could pay a very large fee and turn their one room into a mansion.

What prevents the game from allowing that?

Please consider it. There are only three Large plots per division per ward, and more than three people or Free Companies who want them.