I know there was a suggestion about making the hostel for homeless people only, but I would like to suggest an alternate or additional idea regarding the upgrading issue. I rather like the hostel as it is although I agree it should be renamed to apartments or tenements or something along those lines... OR something else to be added such as a transitional housing facility such as a hotel/motel which people already living in actual houses will not move into.
Personally, I would like to see an option during building where you can tag a house to be reserved for the homeless only. It is difficult to upgrade houses when the new house you build for the displaced family is immediately grabbed up by adults immediately moving in to get out from under their parents' roof. (I mean I totally sympathize with their plight!)
BUT... I need my homeless folks to be a priority. It would be very nice to see this feature added in so that you could build a few houses and tag them homeless only then upgrade and have the new family just move into the specially tagged house.
This way you wouldn't lose children due to 'inability to relocate' or villagers starving while waiting on another house to finish building. Even if you get the house ready and pause it at '1 build left' they can still starve or die from inability to relocate if builders don't get to the build and finish that last build quickly enough. Thanks!