I don't think that I've ever seen a definition of a donut block.
However, if you visualize a donut, that's what your block would
look like if it were a donut block. It has a hole in the middle.
I believe 14x14's are donuts. A 4x14 is more of a solid block.
Little or no gardens. It's good to use in tight building areas
where natural constraints prevent you from building larger blocks.
It's also modular. I like that aspect.
I may be wrong, but I think that donuts have services on the
outside of a circuit road, with housing on the inside, and then
gardens inside of that.
I can tell you one thing however. Your labor shortages had nothing
whatsoever to do with the style of housing blocks that you use.
That only really affects how many people you have. Building the
new blocks fixed it, because you built new blocks. It didn't really
matter what your blocks looked like.
Your problems lay in too many services being offered at the wrong
time and unstable housing. (ie: too early) If you build too fast,
that will happen. If you have supply problems of one or more products,
it can cause your housing to yo-yo up and down. That's bad, real
bad. It really screws up your labor. Build only when the housing
has stablized at a particular level, then only build what the
houses ask for. Query more than one house, because one house may
complain about a market, while the next may be wanting furniture
or oil. Make certain that your supplies for the next level are
in place prior to upping the housing, so they stay there, because
inital consumption is about double maintenance consumption.
That's what I meant when I discussed stabilizing earlier.