It would be nice to expand Crossgate's civil service a little. I'm not sure about elections (do they even have the concept in Crossgate?) but seduction, blackmail, bribery and if all else fails, assassination could all be on the cards.
Not for a while though.
The player has a house already, although you can't do much with it. If it was me, I'd take the penthouse suite in a brothel and armourplate the damn thing. Or the dungeon - at least you can escape through the catacombs if things go seriously pear-shaped.
But yeah, adding rooms and managing it the same as a brothel is doable. The question then this what stops the enterprising player from turning it into a brothel. Easiest way might be to have a player suite as a facility you can add to any building, and then give bonuses based on the quality of the player's digs, so he has an incentive to spend money on things that don't directly generate cash.
Good to hear the politics will be fleshed out eventually.
As for the house, have you ever played a game called Europa 1400: The Guild? If not I suggest you do so because the game that's been created here is like a simplified mirror of that game.... just with more porn. It is a fantastic game that you can pick up from amazon for $10 or less.
Back to the point, in the Guild players own a house which starts off pretty simple but can be expanded upon as the game progresses. These expansions started with simple things like security features that reduce by 2-4% the chance of a burglary being successful, 1 extra "action point" (usually took 6 points to do anything), small health modifiers, and prestige bonuses. But they could be as complex as new rooms which allowed you to throw parties (the ballroom), hire spies (the backroom), have an affair or 5 (music room), hide money (cellar), or to write letters (library).
If you bring these ideas over to Whore Master, then yes the player could turn his house into a brothel but he would lose the bonuses from each room he converted since I doubt you could host a successful dinner party while louts from off the street fuck not 6 feet away. And what is to keep the house from having an optional escape route into the catacombs anyways? Sure it's a bit dangerous of an escape route but the player is living a dangerous life as it is.
Edit: Oh almost forgot, don't bother with the Guild 2. They fucked up the sequel.