I'd like to take an extended break from the game, but...

[Zojha]

Maybe devs hoped housing would help balance servers, and thought, in an ideal world, they wouldn't need an auto-demolish.

Then the devs are sooomewhat bad at math >_>

Right now, we have about 140k plots available across all servers - JP, NA, EU etc. All of them. JP alone almost has that many characters at endgame. Those are just the most active characters.
A quick lodestone search for free companies with the letter A gave over 100k free companies. Those share the housing pool with singular characters. So you'll be distributing 140k slots among roughly 400k candidates. That can't work out, even in a perfectly even spread. Even if only a half of the candidates even want one. Even if you don't account for free companies at all. As such, I'd imagine most of the servers suffer from housing scarcity to some degree - Some more some less. Mateus for example is the smallest server we have and only has like 100 more endgame players than housing plots - I can imagine it's not a big issue there.
(Edit: Talking of bad at math: It's actually 600 more plots than endgame characters on Mateus. We have 12, not 8 wards now. I did it right when calculating the total, tho >_>)

Just looking at the numbers, they probably should have just left the wards for free companies and made personal housing instanced - Those numbers would have worked out nicely. By putting personal housing into the wards they created too much competition for the existing plots. Auto-Demolish is a bandaid fix for that mistake. Love it, hate it - it's what it is.