If SE isn't going to instance neighborhoods then they need to massively overhaul apartments. I'd rather pay $50M gil for a penthouse apartment than $5M for some stupid shoe box in a corner. Translate S,M,L houses into Middle, Corner and Penthouse apartments and scale that to hundreds of floors.
The current apartment buildings are fictitious anyway... you could theoretically have a neighborhood-wide building with dozens of penthouses.
Otherwise, the current FFXIV housing system is trash. It manages to be worse than EverQuest which is saying something.