There's an impressive thread on squalor in the Collosseum. Here's the bottom line: Squalor goes up with your population at a fixed rate, and there's really not a #!&% thing you can do about it.
"Happy" buildings, sanitation and so forth just treat the effects of squalor. The only thing that actually cuts downs squalor itself are new "city hall" buildings like a imperial palace. A few governor's traits also help.
Things like constructing units only seem to reduce squalor, but that's only because they're reducing the population also.
This is a serious problem for the Brutii in particular, because we conquer heavily populated Greece right off the bat. However, I'd rather have the power in Greece.
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