Well, I never knew that increased costs!
I've just hit Chapter 5. I'm not doing too bad for space — I've got one free 5x5 and a 6x4, plus some other smaller areas, and I'll have more space when the Genie/Goddess of Wishes/Ferris Wheel Galore expire.
I enjoyed this event. It was the first one where I've been able to complete the quests and get the main prize up to Lvl 10, and get another Lvl 2 Glory to supplement my wood and marble.