Shared these thoughts in another thread:

It was created with the idea that only FCs would own a ward house at first and that player housing would come later. This is why we have wards. FCs were supposed to hang out in them. Well, the houses were really expensive at launch in an attempt to drain gil from the servers and not many FCs bought them. They didn't have the workshop back then and it was just a luxury/bragging item for FCs. Very few saw the small houses as being worth it (they didn't even have the basement area at the time). 2.1 was the patch that gave us FC housing and that was a HUGE patch for the team. To not see housing take off like they thought at first shifted the dev focus to other projects.

By 2.3 most FCs who wanted a house had one, so SE opened the ward to individuals to fill the wards which were mostly empty as they probably thought that housing wasn't something to really invest time/money. After the initial surges of buyers, it died down again. Again SE kinda kicked the ball down the field since it still wasn't a huge selling feature of the game. Fast forward to the mash up of FC/Player housing which is the mess we have today. Now there's not enough houses for the FCs or players.

Fun fact: the houses were never supposed to ever go "poof" and evict you if didn't login for a set time. This was in keeping with SE team's idea of taking a break to play other games. No maintenance or decay fees either. The evictions are a symptom of the overall housing problem.