Homes are the places where sims live. Building homes increases the population and the number of workers in the city.
There are different types of homes such as private, corporate and government. This determines what kinds of sims they will produce, what clothes they will wear, and what type of cars they will drive.
Private homes are homes which can hold a single family only. Some private homes have families which can have children. Households with children tend to be happier to live in, as child sims visit venues which are right for them and share their happiness with the whole family.
Corporate and government homes tend to hold larger numbers of sims than private homes do, and are great if you want a strong workforce or are aiming for a large population.