Every zone, house, room, dungeon, trial in this game.. is an instance. It is already built for this sort of systen. Why cant it contain 1 yard and one, up-gradable house? Why do we need a whole neighborhood? Its not like you can cook on your neighbors stove or even see inside their houses to begin with. I guess you probably enjoy not being alone in the area or seeing everyones overly stuffed yards that all glow and sparkle. I dont have a preference. Sometimes its cool to see, others not so much. You could still visit other people though just like you would go into the actual houses now. Those are instanced houses. By the way, servers dont need to render anything at all.(Models, colors, what looks like dirt on the flat surface beneath your feet) Thats all on the client side.(your computer) Anything a person is going to affect in a housing area, would be the exact same as if it were in a town or somewhere not housing related. 100 users is 100 users it doesnt matter where they are. However client side, having 1000 users in the scene spamming skills causes lag,(because of all the effects to render) as well as the constant data transfer for each character when each character moves, changes gear, uses and item or heals, all of that data goes in and out your internet to and from server(yours only goes out to server, everyone else's goes in to server too and then to your client from server.) They still only see each user as a list of values(name, stats, position, rotation, current animation, etc)on the server side. Nothing more than a bunch of code. It should not be any harder on an mmo to have instanced housing than open world.. Its like dungeons(thousands of people are in them all over the world all at the same time but you only see your version of the dungeon with your party(four people is a lot less data to transfer than the whole of the current housing areas population[you only recieve certain data from people in your scene[think /say chat range] its coded to be efficient and not waste bandwidth throught something like a scripted filtering system[is this person near me? show them my say message, but if not then dont send anything]), but much much smaller in size content-wise(3d models and scripted events) and distance. They will add those for the next 7/8+ years most likely. I and many others who likely play FFXIV could build it right now all by our selves. Unfortunately I/they don't work for square or know how their particular code is set up and i doubt they'd want to share it with complete strangers. Square should be able to do this. Most likely the real issue is people with different opinions on the subject and people who already have a house and would riot if something happened to it. Its too late to change unless they can bribe the whole community into agreeing.
Sorry for the really long post and i hope its even understandable. Im a passionate fan of this game, and an indie game maker. Its just so frustrating. Also, Im really really sleepy. I pulled an all-nighter lol. Ill review it later after some sleep.
TL;DR: Its probably the most efficient way to make housing to date. Square is a very capable company that could/should definitely know how to do instances properly. They most likely dont want to anger customers. That is most like why theyre taking forever to fix the issue.
Personally, I think a single housing ward would be cool. But more so like a town that everyone shares, with shops(Market board too) and a park, beach, etc. Then have housing separate but connect them with the town parts doorway.(lines of blue dots)
How do you know they are on seperate servers? Even if that were true i doubt a single 4 man instance gets an entire server to its self. That seems weird to me.