It could always be set up so one plot is always the plot on display, with the instanced houses at the same location reached through a placard menu. There are a few ways to design such a system so it would work to satisfy the vast majority of players (will always be those few who find reason to complain).

Quote Originally Posted by LalafellDown View Post
This way the housing divisions will still feel like a community and everyone can get a house wherever they choose to build one.
Houses do not make a community. People make a community.

All the plots in my ward may be filled with houses decorated but it still feels like a ghost town without other players walking around.

Your idea has the potential to make wards feel more like communities by adding more owners to the ward (even if their plots are instanced) but it will be dependent on how many players will spend time in a specific ward to talk to others. The game has too many wards to make that likely to happen.