Upgrading a settlement

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"Manage Settlement" option.

In there it will tell you the costs of the two possible upgrades, and what you currently have.

Below the costs will be the options, and if you meet the requirement then you'll have the option to build an upgrade (like "Build housing").  After you select an upgrade it will take about 20-40 days, and will list the number of days until completion in the "Manage Settlement" part.
 
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