How about a trading town: The Crossroads. A town situated at the crossing of two major roads which serves as the trading capital of the kingdom. The surface is filled with many many highly skilled craftsgnomes from across the world, all hoping to barter their goods away. Underground are the peasant gnomes, living on scraps and producing resources for the wealthy above ground.
Every surface craftsgnome should have his own shop to work at, with their own supply stash in a separate room; in the same building, in a separate room is their own personal quarters, all above ground. There should be restaraunts and taverns for dining rooms for the surface gnomes to feast and relax in instead of dining rooms. The great hall should be a statue garden with the market stalls within it. All peasants live in a communal setting with dormitories and group dining rooms. Everything the peasants have is basic, though some may have a better life, should they become "wealthy enough" to afford their own furnishings in their own room of the undercity.