The same rule is valid for Dwelling conversion.
Set the file in MMH55_Settings.pak to a higher value. For example - 10.
On a second thought that changes only affect newly started games so it wont be of much help to you :(.
Try another thing, if you are playing hotseat, activate console and during game inside console type "H55_AmountExtraTownsDwellings = 10" without the columns.
Then try to convert the town.
Note: AI is cheating. It converts towns for free (or very cheap).