In my opinion, advanced sick bay (5 recovery) provides your main base most bang for the buck once you are able to get it (and you should prioritize getting it for other reasons as well). You can't really get large living quarters into that base (as you have had to expand it one by one). Depending on when you get resources, sometimes you may want to build sensorium (8 recovery) first, but their difference is not so much as to warrant keeping both of them in the long run (given that the space is premium).
For bases that you construct (much) later (when you have more money), large living quarters would indeed be a viable option. But at least I put those only on a research/workshop bases. I haven't usually tried to bother with multiple active assault bases (and thus need for sanity recovery), because you can do everything from one base.