They should reduce to a single ward in each region. Eliminate the ability to decorate the yard/outside of the house. Each housing plot can be purchased by whomever wants it and entering the house takes you to your instance of the inside of the house.

Using this would keep the neighborhood, even making them more active, while also giving everyone the house they want.

Oh, but what about gardening, chocobo, decorations for your yard? How about they add backyard that you can decorate!