One of the things I think a lot of newer people fail to see,
Housing is NOT instanced like it is in other games.

You actually can see and interact with your neighbors.
People can see and visit your house when your offline even.

While this system comes with drawbacks like availability and price tags.
It’s infinitely better than having an instanced house that only you can see.

Now, would more housing districts help?
Possibly, but I for one, would definitely rather have full and alive neighborhoods compared to empty districts after the popularity dies down.