I started to create a new hood by following the step at the link u provided made a new hood I added a new shopping district then I deleteallcharacters them I quit the game I think I should not have done that I then reloaded the game and tried to create townies no success at all I think it created adout 10-15 before I got the error.
Yes, I would try only a base hood, and then deleteallcharacters, then generate without exiting the game. Since the business district doesn't add any new characters unless you choose Bluewater, it should work fine. Are you sure you don't have a hack hiding somewhere that may be causing the conflict?
By the way, I don't personally use deleteallcharacters. I delete the character files. But until this test for the tutorial, I never wanted to generate townies, either.
If you can make a new hood in an account without any downloads/hacks, that may tell you if it is a problem in your downloads folder.