Or just add more wards based on player population. Permit people to move their houses for free from one ward to another so that people can move into more populated communities (must be same house value so if you try to move your B class house to a A class house, it's a no-go, same with trying to move to a different sized house also it needs to be within the same residential area like you can't go from shirogane to lavender)

But you want to know why they don't implement a better housing system? Because they would lose money on subscription. People don't want to lose their mansion that cost 60mil gil + the furniture in it so they stay inactive but subbed, occasionally going back to their house.