Housing Roulette was an absolute trash idea.

[Seraphor]

Pretty much this.

We can add as many wards as we want. That's still 30 more wards that will fill up in an instant because of just how much demand there is for it.

I blame the devs' insistence on wards and a sense of community within housing districts like they were "neighbourhoods". Sorry Yoshida, but that's just not going to happen. It rarely ever happens; most people just stick to their house and don't socialize. My FC's ward is full. And it was full since it was meant to be an FC-only ward. You want to know how many people I see around the place? NONE. The ward is always bleeding empty! And whenever I happen to somehow catch one person out there, there's no interaction. Nothing. And that's how it's always been on Zodiark since 2016. Rarely ever do you actually interact, and at most it's just "hi" and move on with your business.

Because these wards force a limit on how many houses are available. And while I know there are detriments to instanced housing, the way this is made just breeds salt.

I'd say there's a little more to it than just player-player interaction. The lack of that is really just a wider symptom of the game. Players don't generally like to interact unless they have to.
No, as well as that, there's also simply the ability to see your neighbours garden designs, and interact with their garden and enter their house. Being able to do so in a physical ward is 100% better than selecting from a menu. How many people check out other peoples apartments?

There IS merit to having this sort of housing system, even if it comes with downsides. And as I eluded to previously, there is a healthy supply that could meet demand, and reduce the amount of salt.

Adding more wards does make a difference. There might still be 'losers' (not derogatory, but simply people who lose the bid) to complain and supply the salt, but meeting 90% of demand is better than meeting 50% of demand.
Not least, there are less populated servers in which demands have been 100% met and resulted in empty wards. This poses a conundrum, because they can't just go adding 30 wards to every server if server A will then end up at 130% supply, with tons of empty wards, while server B's demands still aren't met, and they can't dish out wards unevenly in case the situation changes, these are permanent additions. Part of the problem is that people are so reluctant to move to different servers.

I do think that a few (maybe 30, maybe even just 20) wards added to each server, plus as significant expansion to the Apartment system, adding outside terraces as an option, would probably be the best solution outside of overhauling the entire thing. Which is obviously not an option because then everyone who does already have a house gets screwed over.