Hi!!! I was having this issue as well and it practically ruined my day after I realized I couldn’t turn my lot into a business.
I found the fix I think!
Apparently, this is only happening to lots that were previously listed as a residential rental. You’ll change it to residential but it still doesn’t show up for the lot assignment.
for some reason, this is because the game still thinks the building is listed under residential rental, and essentially puts the building in purgatory.
the fix is to save the lot as a residential, save the lot into your gallery and just replace the lot from there (in manage worlds), so technically the building is fresh and doesn’t have those dirty “residential rental” codes all mucked up in it.
shouldn’t have expected anything less from EA.
this worked for me! I hope it works for you too!