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The upgrading system is not designed well. My advice would be to use a mod, but if you are playing for achievements you are stuck with it.
my simple method before the 1.94 (can't pass the tavern bug and found a workaround ...), after a mission or if you won more money with trading than your tresory could keep : spam of trees at the same place next a house ... they cost 7 more than 5 before but you will see if the house was in hight desirability after clic on it...i have always does like that since the beginning of the game ^^
I selected the people who already lived in the high desirability houses and promoted them. Hey presto the house upgraded (it seems to trigger as soon as the majority of the people in the house are commoners) this has resulted in some unsuitable low tier workers being Commoners, but I can gradually correct that over time by firing people and gradually swapping around who works where.
So that seems to be the secret. Don't just promote a random unemployed person and give them the new Commoner's job expecting a place in a suitable house to be automatically given to them. People will stay in the same house regardless of it's suitability for them.