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At the moment yes you have to go to adequate and then spacious, it’s been brought up that allowing for going from tier 1 to tier 3 would be nice so I’ve got it on my list of things to do. In the version you are on I’d imagine the spacious one is a better bet as well since its cheap due to a bug at the moment.

IMHO it doesn't make sense to skip tier 2... its a progression, but it is your game :)