I think the silos should be converted to the point where they allow residency in a region (like cottages) and get rid of the no-longer-needed pack storage. Maybe add a 'growth ring' in the spot where packs used to go. Just a small area where you could plant roses around it or something. Don't want to compete with full land plots.

Please, though! With the land shortage, an 8x8 house would be GREAT! Especially for dwarves since they're small!

Or even 8x16 houses!