In your town, every building can be upgraded as long as the requirements are fulfilled. Select the building and click the upgrade icon. 


Then you will see the upgrade window in which all the requirements are listed. The requirements usually include resources and dependencies on other buildings. If the required item is missing due to insufficient amount or unmatching level, they will be marked in red.  


If all requirements are met, there will be buttons for upgrading (Instant or with time required)