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Back in the day it was quite common that people had their workplace in their house.
It allows you to add chicken farm or a vegetable garden.
Later you can add a bakery or a shoemaker workshop to the extension.
The second house icon allows for a future second home to be built.
Helpful tip, if the game is splitting your planned-plot into too many (small) sections, you can click the minus button next to the build-hammer (confirmation) and it will reduce the number of plots that are formed.
As a rule of thumb, wider plots get extensions for you to later build living space for a 2nd family, longer plots get a workshop in the back-yard. Wide and long plots will get both.
There was an exploit(maybe?) in the demo where you could just build a big-a** plot and get lots and lots of vegetables from the garden upgrade but I'm not sure if it still works or if it got nerfed.