For me the esthetic/enviromental/lore/quest value is really high. Especially if you look at ways to go with developing such a feature within a city has alot of potential to act as a time sink and go into macro/micro managment.
Depending on huw much budget Obisdian is willing to sink into this project you could start out with a manor where you slowly start working towards adding Wooden walls and ramparts and where you start gathering a workforce to improve your building.
This can start by aqcuiring the aid of the local woodloggers and artisans trough quests/favors/gold and from there start to expand foward where you act as a feudal lord/regent to the city in charge of providing safety, setting up guilds/housing and starting to add/detract wealth from the city and thus changing how it acts as a community towards you.
From there you could imagine that you then pick up the options to expand your reinforced manor with stone trough a quarry and stronger architecture with the aid of Dwarves/Elves/ any other race ( also this works on more then this level but by sending you over the world in available quest zones instead of only questing near your city and allowing more races to help you push expansion towards a fortress)
Also to not fall into the trap that is created by Assasins Creed Gameplay where you can buy a shop for a few coins and it becomes a cashcow there would be a proper need to set high costs, gathering supplies and finding artisans to work for you. This also increases the sense of accomplishment a player can gain by completing a helpfull building in his city. And we can be honest that insta buying a shop is not particulary rewarding. To me it should be more staggered/phased where you can see construction works ( Foundation- Supporting walls - Roof - Interior) and then moving forward by completing these minor/major quests and into completion. And as a added bonus these new building could then function as minor quest hubs or trading zones.
This also links really well into the crafting aspect which is to be implemented where you just don't suddenly see a blacksmith pop up but where you have to put in some effort ( short quest chain) to build this building.
Another trap which is present in many games is that when you finally have a home and upgraded it , it then just sits there. There are no npc's walking around ( which let's face it is abit strange when you hold court in a stronghold) I think that by adding some options to regulate safety within your city ( Captain of the Guard and allowing to spend money to train and deploy the guard or not)
The options are near endless but we should not get some random building which can't be altered in any way that maybe add's a few hours of gameplay and some money and that's it. The BG2 keep felt abit lackluster in this aspect ( a great example of expanding your own keep was in the addon of Dragon Age where you had alot more influence in the end result)