I once had a town where Blathers wouldn't suggest the second floor. I was starting to freak out!
Turns out I wasn't talking to him at least once per day. I had donated at least one of everything but I didn't walk up to him at least once per day.
I looked it up online and saw I had to talk to him - two days later he suggested the second floor!
You may be close - just keep talking to him! Good luck - wishing you the best and give my regards to Blathers my bestie