Increasing the size of the wards? Wouldn't fix the issue. It'd only make server-burden even worse than it already is.

Instancing housing? It'd defeat the purpose of Outdoor sections of your house. No reason to make it look pretty on the outside if nobody'll ever see it.

Every FC should be able to get a house? They can. You're entitled to a CHANCE at a house. Not a house period.
If everyone got a house, then it would quickly lose all appeal. There would be little reason to invest and effectively work to make your house look good to onlookers when everyone can do it. The fact that housing is limited only works in its favor.