I'm not defending FFXIV's housing setup here, nor saying you all don't have valid points, nor saying that nothing needs to be done. But, I would like to say that instancing housing doesn't instantly solve the problem, and is not necessarily the correct or only solution required. Unless I'm mistaken, SE has posted elsewhere that providing instanced housing would be just as much of a resource drain, if not more so, than the current system, and certainly couldn't be provided alongside it. How then, you say, can they provide nearly unlimited personal rooms? I have no idea, I just know what I remember reading. What I mean though is that we don't know how SE has implemented their databases and network connection interfaces. It does sound though like they couldn't resolve this issue without rewriting the system from scratch, and that is a huge resource drain. It seems like it would require them to stop creating new content and stop looking into resolving the other space issue - personal storage space.
That said, I feel like if they did what you propose and spent the time to rewrite the system, they could resolve both of these space issues at once. Rewrite the retainer, armoire, and housing systems all together. Give us an instanced house (on a floating island in the sea of clouds for all I care) where we can store items off-character. Pool the retainer inventories into a storage locker there. Let us sell items from that storage locker and craft and glamour with materials in that storage locker (a feature that's supposed to be added to retainer inventories). Let us pay in-game money to increase the number of items we can have in a house. Let those of us who currently have houses launch them into the sky, keeping our current house exactly as it is, except in an instance instead of a neighborhood.
Neighborhoods aren't that cool. Having them doesn't make people talk about how awesome FFXIV's housing system is. It just makes people talk about how FFXIV's housing system is inaccessible, elitist, and poorly designed. Those are the conversations I see around the internet and forum sites, not people gushing about how cool it is to have a neighborhood in the game.
Forget the ground. Let us colonize the skies, keeping our houses exactly as they are but also letting more people have them. Rewrite your databases to optimize for instanced housing. Forget the neighborhoods - turn the neighborhood zones into some new content zone later on.
Anyway, what will really happen is some people will lose their hard-earned houses for being inactive. (I feel bad for the US veterans who will come back from the middle east to find their in-game property confiscated because they had the gall to spend a couple months serving their country.) They'll add a bit more inefficiently-handled housing and a way for people to move to biggest houses. The problem will be alleviated for a bit. Complaining will die down. Then the houses will fill again, and complaining will resume. A while later, they'll add more housing. Rinse and repeat. True solutions would take time, but quick fixes are cheap.


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