In order to get the new terrain to show from inside the lot, you have to pick it up and move it, then move it back. It's a pain, I know. I had to do that for my apocalypse lot after I changed the nbhood terrain to desert.
So as long as I pick up and move each lot, the neighborhood should show up with its new terrain type?
Do I need to do this with community lots as well? I'm guessing I do. Since this is downtown, that's a lot of lots, but it'll be worth it. I'm sick of looking at concrete as far as the eye can see.