diff --git a/src/town_cmd.cpp b/src/town_cmd.cpp
index 8928ffdbf942..d5726155d951 100644
--- a/src/town_cmd.cpp
+++ b/src/town_cmd.cpp
@@ -626,7 +626,28 @@ static void TileLoop_Town(TileIndex tile)
 		ClearTownHouse(t, tile);
 
 		/* Rebuild with another house? */
-		if (GB(r, 24, 8) >= 12) BuildTownHouse(t, tile);
+		if (GB(r, 24, 8) >= 12) {
+			/* If we are multi-tile houses, make sure to replace the house
+			 * closest to city center. If we do not do this, houses tend to
+			 * wander away from roads and other houses. */
+			if (hs->building_flags & BUILDING_HAS_2_TILES) {
+				/* House tiles are always the most north tile. Move the new
+				 * house to the south if we are north of the city center. */
+				TileIndexDiffC grid_pos = TileIndexToTileIndexDiffC(t->xy, tile);
+				int x = Clamp(grid_pos.x, 0, 1);
+				int y = Clamp(grid_pos.y, 0, 1);
+
+				if (hs->building_flags & TILE_SIZE_2x2) {
+					tile = TILE_ADDXY(tile, x, y);
+				} else if (hs->building_flags & TILE_SIZE_1x2) {
+					tile = TILE_ADDXY(tile, 0, y);
+				} else if (hs->building_flags & TILE_SIZE_2x1) {
+					tile = TILE_ADDXY(tile, x, 0);
+				}
+			}
+
+			BuildTownHouse(t, tile);
+		}
 	}
 
 	cur_company.Restore();