Each time you want to expand you're going to have to increase your CityVille population first. The space that you have will become a vital part when you reach higher levels. You've completed dozens of quests and that means you've added dozens of new businesses, houses, community buildings and attractions. Where will you get the space to add more houses so you can increase your CityVille population so you can expand your city?!
This issue really comes into play once you hit the higher levels. When you are just starting with the game, you will use your coins to buy cheap houses because you want to increase your population. But all of those little, inexpensive houses don't yield much rent and it takes a lot of energy to keep up with collections. In addition, they will take up precious space in your city.
There comes a time when you need to decide on replacing these inexpensive houses with new, shiny high-rise building to allow more people to live in your city and get more return from your investment. You are the mayor of this city and in this game, it is like a real city that you need to organize and build to progress.
With minimal amount of coins, you are able to make smaller homes like Cozy Cottage, the Country Home and the Family Townhouse which can accommodate 30 to 50 people. Yet you probably have entire blocks of your city filled with this type of housing because it was cheap and required little energy to build.
Your game plan will change as you progress. You will have to replace little home units to modern apartment buildings as well as private estates so that more people can move into your city.
However, when you delete a house, you will remove the population in that house. So, if you're trying to increase your CityVille population by 400 people and you want to delete 10 Cozy Cottages, you're now going to have to increase your population by 520.
Is it really worth it? The answer will depend on your demand for space. But look at it this way: Those 12 Cozy Cottages are taking up an entire expansion area and they net a total of 14,400 coins a day - IF you can spare all of that energy to keep them collected and IF you can be online every single hour of the day. Sadly, most people don't even collect the rent because it require a lot of energy.
On the other hand, you can replace all 12 of those houses - and their populations - with one Atrium Lofts which has a minimum population of 500 and will yield 495 coins per day, without any decorations. Of course, the amount will increase if you add decorations. In addition, it will be easy for you to collect rent as well because you won't need a lot of energy. When you increase your CityVille population by replacing houses you'll end up with a lot of additional space - and some spare energy, too.
Cityille- Tips and tricks to play CityVille

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