It will free up like 50 houses to the 2000+ who need them. I don't think it's a solution at all, but I also don't think adding infinite wards is a solution either.

People will not want small houses, they'll want the medium+large houses, and that will soon become the next big issue. Hell, it already is an issue. The best thing they can do for housing is to give everyone their own instanced home that they can upgrade to larger sizes if they wish.