My idea is a bit elaborate, and sorry if it sounds silly, but say the contest moderator came up with a sim and put that sim at the top of the thread, gave them a background story and their traits and things, and then the contest would be to design a house for the sim A bit like the architect career in Ambitions. For example: You could have a dark dungeon-type lair for a very mean spirited and evil sim, and a romantic atmospheric cottage for a flirty hopeless romantic?
Also, it could be families too, instead of just one sim, which would make it even more challenging. Perhaps a house for two twin brothers who are complete opposites: An unflirty evil sim and a flirty good sim? Actually, maybe they're better not living together in the first place.. xD