All of the standard lots are one story, while ocean view ones can be three stories. However, 'ocean view' lots are significantly larger than the 'standard' lots (twice as big) and they have much more room to build and they are beach-front property, which means building on them increases their town's value much more than if they build on a smaller lot. The home that one begins the game with is located on one of the 'standard' lots, which are smaller and much cheaper to build on than the 'ocean view' lots.
There are two types of housing to consider when one is ready to start building their Sim's dream home: the Standard Residence or the Ocean View Residence.