Beth-el is where Jacob had the famous dream of the ladder. It is also where he first saw God, anointed a pillar to commemorate this event, called the place Beth-el or "the house of God," and finally, vowed to make the Lord his God and to tithe, if he brought him back to Canaan safely (all in Gen 28). Presently, God commands Jacob to return to Beth-el, and “make there an altar unto God” (35:1). Why?
It has been many years (perhaps a decade) since Jacob left Haran, when the Lord described himself as "the God of Beth-el" (31:13). The present command is a follow-up to a similar one that precipitated Jacob’s departure from Haran: “Return unto the land of thy fathers, and to thy kindred; and I will be with thee.” (31:3) Clearly, the Lord is, with mercy and forebearance, reminding the tardy Jacob to fulfill his vow.
Now, a key part of Jacob’s vow was his promise to tithe: “I will surely give the tenth unto thee.” (Gen 28:22) But in what would giving a tenth consist? His possessions take the form primarily of livestock; the suggestion, then, is that he would offer a tenth of the livestock as a sacrifice. This is consistent with the Lord’s command now to “make there an altar unto God”.
The command, in the same verse, to "dwell" in Beth-el might seem more puzzling. We must examine the words involved. Translations such as the NASB and NIV also have “live” and “settle” in place of the KJV's “dwell.” These translations suggest remaining in a location for a considerable time, but the Hebrew is rather broader than that: יָשַׁב or yashab is glossed “to sit, remain, dwell”. As this suggests, sometimes the word means quite simply “sit,” as in “he sat [yashab] in the tent door in the heat of the day” (Gen 18:1). So it seems possible that by “dwell” the Lord simply meant to “stay” or “stop by.”
As far as we are told, the only things the clan does at Beth-el is build an altar, bury the aged servant Deborah, offer a sacrifice, hear from the Lord, and finally erect and anoint a memorial stone or “pillar.” The text does not say they build a more literal house or do anything else that implies “settling” for any longer than a brief stay. Indeed, after erecting the pillar, the scene in the narrative, at least, immediately changes, so that they “journeyed from Bethel; and there was but a little way to come to Ephrath” (35:16).
We might leave matters there if it were not for the meaning of "Beth-el": again, "the house of God." As Jacob said: "How dreadful is this place! this is none other but the house of God, and this is the gate of heaven." (28:17) And where have we heard "I will dwell in the house of the Lord for ever" before? Of course, in the famous Psalm 23 (verse 6). The phrases "the house of God" and "the house of the Lord" are repeated throughout the OT. They mean the place where the Lord resides or visits on earth, particularly "between the cherubim" in the Holy of Holies in the temple in Jerusalem. Thus, when in the present verse the Lord commands Jacob to "go up to Beth-el, and dwell there", he is actually subtly instructing the patriarch to "dwell in the house of the Lord," i.e., to visit the place where the Lord himself dwells. And then, after Jacob arrives and makes his tithe, i.e., a sacrifice (35:7), it is not at all surprising that the Lord should communicate another blessing to him (35:9-13).