Instanced housing just isn't gonna happen. It ruins the whole point and value of an estate expecially for the RP community that hold parties. If it is instanced it takes away on the realism of RPing.

Housing is inclined toward FCs since it makes the most sense. A FC can house a lot of players then a private that houses 1 with up to 3 tenants. It wouldn't make sense logistically to have more privates over more FC housing.
Maybe the islands will make it better for those seeking their own place since the only benefit if a private house is gardening. FCs provide the airships and submarines as well as gardening to the whole FC.

Both methods of getting a house, placard spam or lottery, are flawed bit in general the lottery seems more fair. It took me 15 tried to get a small house spamming placards over the course of 3 months. It was possible with enought effort. Housing, to me at least, is something you really need to work for. At least before the lottery everyone seemed to have wanted but now don't want. It sucks but just gotta keep trying.

They did not intentionally screw up the lottery system and they are working on a resolution. Saying they aren't communication is ridiculous. SE communicated fantastically compared to other games and does seem to care about their player base. Be patient, keep trying, adventually your effort will be rewarded.