housing conundrum: there needs to be a better way.

[VerdeLuck]

To some people, yes. But Instanced housing could free up more ward housing for those who prefer it. How many houses do you see in your neighborhoods that are empty? How many that look like literal storage lockers? Instanced housing would appeal to the FOMO crowd who holds on to a house because they might want to play with it in the future. It would give those using housing storage as just another inventory a way to do so without taking up a ward house and leaving it essentially unused. And since instanced houses don’t need to be permanently loaded, they wouldn’t need to be subject to auto-demo, so they’d also appeal to those more casual types who don’t want to be chained to a sub every other month. (And it also opens up the possibility of your house being converted to an instanced house instead of actually being demolished should your timer expire…) Instanced could also let you choose your house/plot size, so you could have a large without having to wait for one of the 6 per ward to open and test your RNG luck. Add to that the people who don’t care about having a “prestigious” address or location, and just want a creative space to decorate, and I think overall instanced housing solves a lot of issues, the main one being scarcity. Not to mention the possibility of additional features that they can’t add to the permanently loaded ward houses because of the massive amount of lag and/or server drain they’d cause.

It's not going to free up ward housing. At best it will just be +1 to the house count of the people who already have multiple. They aren't giving up their ward house unless SE says you can't have both at the same time.
You're too trusting in that people will be nice, play fair, and share a limited resource. The fact that people own entire wards to themselves and have continued to for half a decade while housing has been ridiculouly hard to get a house for new players shows that is not going to happen.
SE has to put hard limits on pretty much everything in this game to prevent greedy players from snapping up more than their share of limited resource and locking others out.