If you get a Housing Permit on your small, it will increase the "discount value" when you upgrade. Since you sank more gil into the sink. The general Discount is 30% of what you paid for your Small is taken off the Medium.

Granted, if you don't put ANYTHING on your plot, you'll lose it automatically after a while. Even with housing the way it is, it'd be better to play it safe and get the permit. Don't want you to wake up one day and lose the plot because you didn't do anything with it, now do we?