I think if you are able to just upgrade housing to the next level than you will have a city full of mansions... which is absolutely ridiculous in they are trying to create a living breathing world.
The only problem that I can see with the suggestion is that the housing doesn't directly upgrade. I seem to remember that estates, for example, held fewer population but brought more prestige than houses. Please correct me if I'm wrong.
as i remember it, population increased with prestige to the point that a mansion was always going to be the best, for population and prestige. But i haven't looked at the numbers in the new beta, maybe they changed it?
I still rather have them scrapping the whole housing idea. It's lots of micromanagement without any real benefits for gameplay imho. I rather have meaningful options for building then some insignificant houses that increases the population cap by some.
Yes, I like the idea of having different kinds of houses in your civilization i would even like to see them in order to see how rich the people of that city are, but i don't know if i like building them myself. I just don't think its realistic at all to have only mansions in a city. And while the mention of the word "realistic" will make people freak out, tell me what RPG (be it Elder Scrolls, Dragon Age, or whatever) has only rich people in the cities? a living, breathing world is made up of rich and poor and this game should portray that i think. With cities filled with huts and hovels of the poor and slaves and manses filled with rich merchants or lords. That's something i expect to see in the world of an RPG.