Apartments are instanced housing options that appear in Nodes at Stage 4 if the local government permits it. One key thing about apartments is they get more expensive the more apartments that are sold, so while there is no hard cap on the number of citizens in a Node, there is a soft cap by the Number of Houses plus the number of Freehold spots added together plus the reasonable rent on the Apartments. Granted, if someone really wants to live in a Node and they have an obscene amount of money, they can always buy into the Apartment at high price.
Instanced apartments can be specifically targeted during a siege and destroyed. What happens to the contents of the Apartment when this happens is unknown.