I have read some people demolish some houses when they have enough townpeople, and rebuild them when needed.

So far I always managed to fit in new ‘old’ houses that were added in an update, but this time I don’t see how...

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So my question:
how does it work exactly?
you just delete some houses you can’t use and buy and build them again when a new update is out and you have too little people? Can do it with any house? And the same over and over again?