There are several ways you can free up space for constructing of new buildings:
1. Cut down trees and prune bushes by tapping on them.
2. Move existing buildings closer to each other: tap on the icon with the picture of a hand located in the bottom part of the game screen, press the building and drag it to a new location.
3. Move buildings to the Warehouse: tap on the button with a picture of a hand, press the button with the picture of a box, then tap on the building that you want to place into the Warehouse.