diff --git a/crates/citygen/src/generate/lots.rs b/crates/citygen/src/generate/lots.rs
new file mode 100644
index 0000000..acfd30b
--- /dev/null
+++ b/crates/citygen/src/generate/lots.rs
@@ -0,0 +1,313 @@
+//! Stage 5: lots and building placement.
+
+use super::{GenCtx, Lot, LotUse, Stage, StageRunner, StepOut};
+use crate::geom::{Pos, Rect};
+use crate::ids::BuildingId;
+use crate::params::GenError;
+use crate::rng::{chance, pick_weighted};
+use crate::theme::{StreetStyle, ThemeSpec};
+use crate::tile::Terrain;
+use crate::world::{Building, BuildingKind, HeightClass, StrataSpan, StratumKind};
+use rand::Rng;
+use rand_chacha::ChaCha8Rng;
+
+#[derive(Default)]
+pub(crate) struct LotsStage {
+    next: usize,
+    filled: bool,
+    rng: Option<ChaCha8Rng>,
+}
+
+/// Splits a block into lots no smaller than `min` and no larger than twice that.
+fn bsp(rng: &mut ChaCha8Rng, rect: Rect, min: (i32, i32), out: &mut Vec<Rect>) {
+    let (min_w, min_h) = min;
+    let split_w = rect.w > 2 * min_w;
+    let split_h = rect.h > 2 * min_h;
+    if !split_w && !split_h {
+        out.push(rect);
+        return;
+    }
+    let vertical = if split_w && split_h {
+        rect.w as f32 / min_w as f32 >= rect.h as f32 / min_h as f32
+    } else {
+        split_w
+    };
+    let jitter: f32 = rng.random_range(0.4..0.6);
+    if vertical {
+        let s =
+            (rect.x + (rect.w as f32 * jitter) as i32).clamp(rect.x + min_w, rect.right() - min_w);
+        bsp(rng, Rect::new(rect.x, rect.y, s - rect.x, rect.h), min, out);
+        bsp(
+            rng,
+            Rect::new(s, rect.y, rect.right() - s, rect.h),
+            min,
+            out,
+        );
+    } else {
+        let s =
+            (rect.y + (rect.h as f32 * jitter) as i32).clamp(rect.y + min_h, rect.bottom() - min_h);
+        bsp(rng, Rect::new(rect.x, rect.y, rect.w, s - rect.y), min, out);
+        bsp(
+            rng,
+            Rect::new(rect.x, s, rect.w, rect.bottom() - s),
+            min,
+            out,
+        );
+    }
+}
+
+fn choose_class(rng: &mut ChaCha8Rng, kind: BuildingKind, spec: &ThemeSpec) -> HeightClass {
+    let allowed = kind.height_classes();
+    if allowed.contains(&HeightClass::Tall) && chance(rng, spec.tall) {
+        HeightClass::Tall
+    } else if allowed.contains(&HeightClass::Mid) && chance(rng, spec.mid) {
+        HeightClass::Mid
+    } else if allowed.contains(&HeightClass::Low) {
+        HeightClass::Low
+    } else {
+        allowed[0]
+    }
+}
+
+impl LotsStage {
+    fn place_block(&mut self, ctx: &mut GenCtx, idx: usize) {
+        let block = ctx.scratch.blocks[idx];
+        let district = ctx.city.district(block.district).clone();
+        let spec = district.theme.spec();
+        let density = ctx.params().density;
+        let rng = self.rng.as_mut().expect("begin sets rng");
+
+        let mut lots = Vec::new();
+        bsp(rng, block.rect, spec.min_lot, &mut lots);
+        for lot in lots {
+            if lot.w < 4 || lot.h < 3 {
+                ctx.stratum_fill(StratumKind::Street, lot, Terrain::Plaza);
+                ctx.scratch.lots.push(Lot {
+                    rect: lot,
+                    district: district.id,
+                    use_: LotUse::Plaza,
+                });
+                continue;
+            }
+            let plaza_p = spec.plaza * (1.3 - density);
+            if chance(rng, plaza_p) {
+                let parking = matches!(
+                    district.theme,
+                    crate::world::Theme::CorpCore | crate::world::Theme::Industrial
+                ) && rng.random_bool(0.5);
+                ctx.stratum_fill(StratumKind::Street, lot, Terrain::Plaza);
+                ctx.scratch.lots.push(Lot {
+                    rect: lot,
+                    district: district.id,
+                    use_: if parking {
+                        LotUse::Parking
+                    } else {
+                        LotUse::Plaza
+                    },
+                });
+                continue;
+            }
+            let kind = *pick_weighted(rng, spec.mix);
+            let class = choose_class(rng, kind, spec);
+            let basement = chance(rng, spec.basement);
+            let mut footprint = lot;
+            if matches!(spec.street_style, StreetStyle::Organic | StreetStyle::Strip)
+                && chance(rng, 0.3)
+            {
+                footprint = match rng.random_range(0..4) {
+                    0 if lot.w > 4 => Rect::new(lot.x + 1, lot.y, lot.w - 1, lot.h),
+                    1 if lot.w > 4 => Rect::new(lot.x, lot.y, lot.w - 1, lot.h),
+                    2 if lot.h > 3 => Rect::new(lot.x, lot.y + 1, lot.w, lot.h - 1),
+                    3 if lot.h > 3 => Rect::new(lot.x, lot.y, lot.w, lot.h - 1),
+                    _ => lot,
+                };
+            }
+            let id = BuildingId(ctx.city.buildings.len() as u32);
+            let span = StrataSpan::from_class(class, basement);
+            for p in footprint.iter() {
+                let on_border = p.x == footprint.x
+                    || p.y == footprint.y
+                    || p.x == footprint.right() - 1
+                    || p.y == footprint.bottom() - 1;
+                ctx.set_terrain(
+                    StratumKind::Street,
+                    p,
+                    if on_border {
+                        Terrain::Wall
+                    } else {
+                        Terrain::Floor
+                    },
+                );
+                for k in span.iter() {
+                    if let Some(t) = ctx.city.tile_mut(k, p) {
+                        t.building = Some(id);
+                    }
+                }
+            }
+            ctx.city.buildings.push(Building {
+                id,
+                kind,
+                district: district.id,
+                footprint,
+                span,
+                name: None,
+            });
+            ctx.scratch.lots.push(Lot {
+                rect: lot,
+                district: district.id,
+                use_: LotUse::Building {
+                    kind,
+                    class,
+                    basement,
+                },
+            });
+        }
+    }
+
+    /// Any zoned land still untouched becomes a back alley so nothing is unreachable void.
+    fn fill_leftovers(ctx: &mut GenCtx) {
+        let size = ctx.size();
+        for y in 0..size.h as i32 {
+            for x in 0..size.w as i32 {
+                let p = Pos::new(x, y);
+                let Some(t) = ctx.city.tile(StratumKind::Street, p) else {
+                    continue;
+                };
+                if t.district.is_some() && t.terrain == Terrain::Void {
+                    ctx.set_terrain(StratumKind::Street, p, Terrain::Alley);
+                }
+            }
+        }
+    }
+}
+
+impl GenCtx {
+    /// Fills a rect with `terrain` on one stratum (no district check).
+    pub fn stratum_fill(&mut self, k: StratumKind, r: Rect, terrain: Terrain) {
+        for p in r.iter() {
+            self.set_terrain(k, p, terrain);
+        }
+    }
+}
+
+impl StageRunner for LotsStage {
+    fn begin(&mut self, ctx: &mut GenCtx) -> Result<(), GenError> {
+        self.rng = Some(ctx.rng(Stage::Lots));
+        self.next = 0;
+        self.filled = false;
+        ctx.scratch.lots.clear();
+        Ok(())
+    }
+
+    fn step(&mut self, ctx: &mut GenCtx) -> Result<StepOut, GenError> {
+        let n = ctx.scratch.blocks.len();
+        if self.next < n {
+            self.place_block(ctx, self.next);
+            self.next += 1;
+            return Ok(StepOut::Continue(0.95 * self.next as f32 / n as f32));
+        }
+        if !self.filled {
+            Self::fill_leftovers(ctx);
+            self.filled = true;
+            return Ok(StepOut::Continue(1.0));
+        }
+        Ok(StepOut::Finished)
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use crate::generate::Generator;
+    use crate::generate::testutil::small;
+    use crate::params::{GenParams, SizePreset, WaterMode};
+    use crate::tile::Terrain;
+    use crate::world::{StratumKind, Theme};
+
+    #[test]
+    fn buildings_fit_blocks_and_do_not_overlap() {
+        let c = small(41, WaterMode::Bay, 7);
+        assert!(
+            c.buildings.len() > 40,
+            "only {} buildings",
+            c.buildings.len()
+        );
+        let st = c.stratum(StratumKind::Street).unwrap();
+        for (i, a) in c.buildings.iter().enumerate() {
+            assert_eq!(a.id.index(), i);
+            assert!(
+                a.footprint.w >= 4 && a.footprint.h >= 3,
+                "{:?}",
+                a.footprint
+            );
+            for b in &c.buildings[i + 1..] {
+                assert!(
+                    !a.footprint.intersects(b.footprint),
+                    "{:?} overlaps {:?}",
+                    a.id,
+                    b.id
+                );
+            }
+            for p in a.footprint.border() {
+                assert!(
+                    matches!(
+                        st.tiles[p].terrain,
+                        Terrain::Wall | Terrain::Door | Terrain::Window
+                    ),
+                    "{p:?} is {:?}",
+                    st.tiles[p].terrain
+                );
+                assert_eq!(st.tiles[p].building, Some(a.id));
+            }
+            for p in a.footprint.inset(1).iter() {
+                assert!(st.tiles[p].terrain != Terrain::Void && !st.tiles[p].is_outdoor_ground());
+            }
+            assert_eq!(st.tiles[a.footprint.center()].district, Some(a.district));
+        }
+    }
+
+    #[test]
+    fn corp_core_has_tall_buildings_and_no_void_left_on_land() {
+        let c = small(41, WaterMode::None, 7);
+        let core = c
+            .districts
+            .iter()
+            .find(|d| d.theme == Theme::CorpCore)
+            .unwrap()
+            .id;
+        assert!(
+            c.buildings
+                .iter()
+                .any(|b| b.district == core && b.span.hi == StratumKind::Heights)
+        );
+        let st = c.stratum(StratumKind::Street).unwrap();
+        assert_eq!(
+            st.tiles
+                .iter()
+                .filter(|(_, t)| t.terrain == Terrain::Void && t.district.is_some())
+                .count(),
+            0
+        );
+    }
+
+    #[test]
+    fn density_changes_plaza_share() {
+        let run = |seed, density| {
+            Generator::run(GenParams {
+                seed,
+                density,
+                size: SizePreset::Custom { w: 120, h: 60 },
+                districts: 5,
+                ..Default::default()
+            })
+            .unwrap()
+            .buildings
+            .len()
+        };
+        let lo: usize = (4..8).map(|s| run(s, 0.2)).sum();
+        let hi: usize = (4..8).map(|s| run(s, 0.95)).sum();
+        assert!(
+            lo < hi,
+            "low density {lo} should yield fewer buildings than high {hi}"
+        );
+    }
+}
diff --git a/crates/citygen/src/generate/mod.rs b/crates/citygen/src/generate/mod.rs
index a9b72fe..d0304f6 100644
--- a/crates/citygen/src/generate/mod.rs
+++ b/crates/citygen/src/generate/mod.rs
@@ -2,6 +2,7 @@
 
 pub mod arterials;
 pub mod districts;
+pub mod lots;
 pub mod streets;
 pub mod terrain;
 
@@ -227,6 +228,7 @@ pub(crate) fn runner_for(stage: Stage) -> Box<dyn StageRunner> {
         Stage::Districts => Box::new(districts::DistrictsStage::default()),
         Stage::Arterials => Box::new(arterials::ArterialsStage::default()),
         Stage::Streets => Box::new(streets::StreetsStage::default()),
+        Stage::Lots => Box::new(lots::LotsStage::default()),
         _ => Box::new(NoopStage),
     }
 }
diff --git a/crates/citygen/src/generate/streets.rs b/crates/citygen/src/generate/streets.rs
index 6de03ae..48941e9 100644
--- a/crates/citygen/src/generate/streets.rs
+++ b/crates/citygen/src/generate/streets.rs
@@ -284,57 +284,71 @@ impl Carver<'_> {
         }
     }
 
-    /// Shrinks a candidate until every cell is untouched land of this district.
-    fn fit_block(&self, mut r: Rect) -> Option<Rect> {
-        let bad = |ctx: &GenCtx, p: Pos| {
-            !ctx.is_land(p)
-                || !ctx.in_district(p, self.d)
-                || ctx.terrain(StratumKind::Street, p) != Terrain::Void
-        };
+    fn is_bad(&self, p: Pos) -> bool {
+        !self.ctx.is_land(p)
+            || !self.ctx.in_district(p, self.d)
+            || self.ctx.terrain(StratumKind::Street, p) != Terrain::Void
+    }
+
+    /// Drops edge rows/columns that are entirely unusable.
+    fn trim(&self, mut r: Rect) -> Rect {
+        loop {
+            if r.w < 1 || r.h < 1 {
+                return r;
+            }
+            if (r.x..r.right()).all(|x| self.is_bad(Pos::new(x, r.y))) {
+                r = Rect::new(r.x, r.y + 1, r.w, r.h - 1);
+            } else if (r.x..r.right()).all(|x| self.is_bad(Pos::new(x, r.bottom() - 1))) {
+                r = Rect::new(r.x, r.y, r.w, r.h - 1);
+            } else if (r.y..r.bottom()).all(|y| self.is_bad(Pos::new(r.x, y))) {
+                r = Rect::new(r.x + 1, r.y, r.w - 1, r.h);
+            } else if (r.y..r.bottom()).all(|y| self.is_bad(Pos::new(r.right() - 1, y))) {
+                r = Rect::new(r.x, r.y, r.w - 1, r.h);
+            } else {
+                return r;
+            }
+        }
+    }
+
+    /// Greedy shrink from the dirtiest side until clean or too small.
+    fn shrink(&self, mut r: Rect) -> Option<Rect> {
         for _ in 0..12 {
             if r.w < 5 || r.h < 4 {
                 return None;
             }
             let top = (r.x..r.right())
-                .filter(|x| bad(self.ctx, Pos::new(*x, r.y)))
+                .filter(|x| self.is_bad(Pos::new(*x, r.y)))
                 .count();
             let bottom = (r.x..r.right())
-                .filter(|x| bad(self.ctx, Pos::new(*x, r.bottom() - 1)))
+                .filter(|x| self.is_bad(Pos::new(*x, r.bottom() - 1)))
                 .count();
             let left = (r.y..r.bottom())
-                .filter(|y| bad(self.ctx, Pos::new(r.x, *y)))
+                .filter(|y| self.is_bad(Pos::new(r.x, *y)))
                 .count();
             let right = (r.y..r.bottom())
-                .filter(|y| bad(self.ctx, Pos::new(r.right() - 1, *y)))
+                .filter(|y| self.is_bad(Pos::new(r.right() - 1, *y)))
                 .count();
             if top + bottom + left + right == 0 {
-                let interior_bad = r.inset(1).iter().any(|p| bad(self.ctx, p));
-                if !interior_bad {
-                    return Some(r);
+                match r.inset(1).iter().find(|p| self.is_bad(*p)) {
+                    None => return Some(r),
+                    Some(p) => {
+                        if (p.x - r.x) * r.h < (p.y - r.y) * r.w {
+                            r = Rect::new(p.x + 1, r.y, r.right() - p.x - 1, r.h);
+                        } else {
+                            r = Rect::new(r.x, p.y + 1, r.w, r.bottom() - p.y - 1);
+                        }
+                        continue;
+                    }
                 }
-                // An interior obstacle (arterial crossing); shrink the side nearest to it.
-                let p = r
-                    .inset(1)
-                    .iter()
-                    .find(|p| bad(self.ctx, *p))
-                    .expect("interior_bad");
-                if (p.x - r.x) * r.h < (p.y - r.y) * r.w {
-                    r = Rect::new(p.x + 1, r.y, r.right() - p.x - 1, r.h);
-                } else {
-                    r = Rect::new(r.x, p.y + 1, r.w, r.bottom() - p.y - 1);
-                }
-                continue;
             }
-            let top_f = top as f32 / r.w as f32;
-            let bottom_f = bottom as f32 / r.w as f32;
-            let left_f = left as f32 / r.h as f32;
-            let right_f = right as f32 / r.h as f32;
-            let max = top_f.max(bottom_f).max(left_f).max(right_f);
-            if max == top_f {
+            let fr = |n: usize, len: i32| n as f32 / len as f32;
+            let (t, b, l, rr) = (fr(top, r.w), fr(bottom, r.w), fr(left, r.h), fr(right, r.h));
+            let max = t.max(b).max(l).max(rr);
+            if max == t {
                 r = Rect::new(r.x, r.y + 1, r.w, r.h - 1);
-            } else if max == bottom_f {
+            } else if max == b {
                 r = Rect::new(r.x, r.y, r.w, r.h - 1);
-            } else if max == left_f {
+            } else if max == l {
                 r = Rect::new(r.x + 1, r.y, r.w - 1, r.h);
             } else {
                 r = Rect::new(r.x, r.y, r.w - 1, r.h);
@@ -342,6 +356,51 @@ impl Carver<'_> {
         }
         None
     }
+
+    /// Turns one candidate into clean blocks: trims dead edges, and when the rest is still
+    /// dirty, splits it along the longer axis (painting an alley on the cut) and recurses.
+    fn fit_blocks(&mut self, r: Rect, depth: u8, out: &mut Vec<Rect>) {
+        let r = self.trim(r);
+        if r.w < 5 || r.h < 4 {
+            return;
+        }
+        if !r.iter().any(|p| self.is_bad(p)) {
+            out.push(r);
+            return;
+        }
+        let can_split_w = r.w >= 11;
+        let can_split_h = r.h >= 9;
+        if depth > 0 && (can_split_w || can_split_h) {
+            let vertical = if can_split_w && can_split_h {
+                r.w >= r.h
+            } else {
+                can_split_w
+            };
+            if vertical {
+                let s = r.x + r.w / 2;
+                paint_vline(self.ctx, s, r.y, r.bottom(), Line::ALLEY, self.d);
+                self.fit_blocks(Rect::new(r.x, r.y, s - r.x, r.h), depth - 1, out);
+                self.fit_blocks(
+                    Rect::new(s + 1, r.y, r.right() - s - 1, r.h),
+                    depth - 1,
+                    out,
+                );
+            } else {
+                let s = r.y + r.h / 2;
+                paint_hline(self.ctx, s, r.x, r.right(), Line::ALLEY, self.d);
+                self.fit_blocks(Rect::new(r.x, r.y, r.w, s - r.y), depth - 1, out);
+                self.fit_blocks(
+                    Rect::new(r.x, s + 1, r.w, r.bottom() - s - 1),
+                    depth - 1,
+                    out,
+                );
+            }
+            return;
+        }
+        if let Some(fitted) = self.shrink(r) {
+            out.push(fitted);
+        }
+    }
 }
 
 impl StreetsStage {
@@ -373,16 +432,18 @@ impl StreetsStage {
             StreetStyle::Strip => carver.strip(),
         }
         let candidates = std::mem::take(&mut carver.candidates);
-        let mut blocks: Vec<Block> = Vec::new();
+        let mut fitted = Vec::new();
         for c in candidates {
             let Some(c) = c.clamp_to(carver.bounds) else {
                 continue;
             };
-            if let Some(fitted) = carver.fit_block(c)
-                && blocks.iter().all(|b| !b.rect.intersects(fitted))
-            {
+            carver.fit_blocks(c, 4, &mut fitted);
+        }
+        let mut blocks: Vec<Block> = Vec::new();
+        for rect in fitted {
+            if blocks.iter().all(|b| !b.rect.intersects(rect)) {
                 blocks.push(Block {
-                    rect: fitted,
+                    rect,
                     district: district.id,
                 });
             }