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What exactly is the Mayor's House?

It's a player home. Gives you food, water and a place to sleep. Very useful for survival mode. It has an effect on happiness when you upgrade it.
 
I've built a Mayor's house. The plaque shows negative hapiness corelating to the number of settlers. I.e. -36 at a 36 person settlement. Is this the correct behaivior?

Edit - I found the answer. Apperently it's the sought behaivior. At lvl2 and 3 it adds hapiness.
 
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