Incentives work. Punishments don't. So try to always think along the line of encouraging people to do something instead of forcing them to do so.
Also, the current problem with estates is people are not interested in staying in the region where you get less gold. If you get more gold as a knight of a city, you are more likely to ditch your rural estate for a city one.
Estate buildings have been approved already and eventually it will get implemented. It should encourage knights to actually 'invest' in your estate and make you more inclined to stay where you are than move to another estate.
