They should pause houses demolition for a time

[ForteNightshade]

if its no longer worth the sub fee... why are you worrying about a virtual house?

its not a "hostage situation" its a "misplaced priorities" situation

This kind of misses the point. Just because someone might not feel the game is worth playing over a specific period doesn't mean they actively want to quit entirely. Case in point, I went through a spell where I barely logged in for over three months. I still had every intention of coming back but if I let my sub lapse beyond 45 days, I'd lose my house and basically never have a chance at getting it back.

If the whole demolition system was simply about clearing out space for players with no intention of coming back, they could extend it to the length of a given patch. It achieves the same thing but actually allows players to take breaks without wiggling around 45 day periods. They won't do this because it locks you in and there's no incentive to change that.

I have a friend list that still includes the character of a dear friend who was taken by cancer over a year ago, and I know I can never move my character to another data center without my Friend list getting wiped, and I will never get my friend back on there.

Even if you transfer, your friend list remains intact. If it's within the same region, you just have to press the little connection symbol that appears next to their name.

Instanced housing is terrible, they did it with island sanct and you see how many people actually like that or an on there. For myself my island is still level 3 I been there exactly one time. Limited Ressource is cool because it makes you feel good about having it. Watch people neglect their instanced house in 2-3 weeks of making them so.

Island Sanctuary isn't instanced house. It's just a random instance zone with an objective based system and quite literally nothing else. As Toutatis outlined, you have none of the basic utilities housing provides. Hence why people either visit it once a week for five minutes to put in their weekly spreadsheet or have abandoned it altogether.

Actual instanced housing would essentially be what Apartments should have been except bigger and potential access to things like a market board. It's widely successful in just about every other MMO or heck, even lifestyle games like the Sims. FFXIV is literally one of the only holdouts clinging to a dated system that hasn't worked for years. They just don't want to accept the whole neighborhood aspect doesn't work when you can't meet the demand. Not to mention, most players simply don't care to social around their houses.