Instanced housing = Apartments with a front yard.

Rather than tear down the system in place and screw over people who like things as they are, why not spend more time advocating for updating how apartments work?

As an example, create Tiered Apartments you pay for. Tier one - Current Apartment type: 100 Item placement. Tier 2- same size as a current cottage with upstairs and downstairs, 200 item placement. Tier 3 Apartment - Upstairs, downstairs, 300 Item Limit, and a "Balcony" area that can hold 10 outdoor items. Pricepoint could be 500k, 1 Mil, 2.5 Mil.

Same time, youd increase Housing sizing as promised - Cottage is 30/400 item ext/int, Medium is 40/600, and large is 60/800.

This pretty much gets you to solve both problems at the same time. Housing system remains in place with incentive to have a house (more item size + exterior customization + neighborhood) while giving people something that is instanced so if you want one but cant get a cottage, you can get something similar. Im more than confident that given this option, youll clear up 90% of housing complaints as people will just purchase T3 Apartments if they want a cottage like setup.