Having known people with round houses… everything is more expensive and mostly you have to make custom stuff for it to work well. Shelves, kitchen units, beds etc. are all a bit awkward and end up with gaps or unused space. You end up with wedge shaped rooms that just feel a bit wonky. Depending on how round you make the house, windows and doors, gutters, etc. can also be really difficult. No contractors are familiar with how to lay out roofing and flooring.
Round homes are structurally stronger and more energy efficient due to better heat circulation and less exterior surface area for heat to escape.
I think rectangular homes are simply easier to tetris together in the grid of big city streets.
If you want a strong house that can hold a lot of extra weight though, the best shape to go with is a hexagon. They have the advantage of round homes but they tessellate perfectly without wasted space. The honeycomb shape is prevalent in nature due to its efficiency in every way.
First, it starts with the building materials. Many houses are built out of wood which comes from the trunk of trees which tends to be straight.
Second, the effort and “technology”. Forming straight lines are easy – a string pulled taut is straight. Measuring straight lengths is also easy. Right angles are very easy to form knowing basic quantities (like a 3,4,5 triangle). And cutting and joinery is also simple. Circles, not so much. We can draw circles easily but forming things and making things meet is not easy. With limited human resources, a rectangular house is just much less effort. You have to consider things like window and door openings which are much harder to seal.
Circles are maximally efficient at holding the largest possible area within a finite perimeter; this is good because it means you can maximize the amount of “room” you get when you have a limited amount of “wall” to build a single room with. Unfortunately, if you push a bunch of circles together (think coins on a table-top) there will always be some empty gaps in between.
Rectangles, on the other hand are maximally efficient at “stacking” alongside other rectangles without leaving empty gaps in between; but technically only have at-most 78.5% the internal area compared to a circular room for a given amount of wall perimeter.
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In modern cities, most buildings follow the rectangular convention because most are multi-room structures that want to minimize those kinds of empty gaps (and the same goes for adjoined buildings with shared walls); additionally, there is the added benefit that construction is faster/easier/cheaper if everything is done at right angles using rectangular-cut lumber and other building materials. (When comparing apples-to-apples of having a single contractor build a square-home-with-square-walls versus having them build a circular-home-with-curved-walls on the same/similar lots.)
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