I would like to see both Player housing and Linkshell housing.

I like the OP's ideas on how to build up the house. However, I would like to see that there is a beginner shack that every player gets for free. The player should be able to upgrade the shack, but not in any major way. This shack would have the cheapest foundation, so it couldn't support more than a single story, nor could it support high quality walls or heavy furniture.

Once the player decides that this house is not enough, he is given the option to sell it (to a NPC). Selling his house does not net him much money, definitely less than the amount of money put into the house in terms of upgrades. After the player sold his or her house, they would get the option to buy a plot of land. The land would come in several shapes, sizes, features, and of course, costs. The largest would of course be very expensive. (I should have mentioned a while ago, that this idea depends on individually instanced player housing) While the player is currently homeless, they would be able to use a room at the in. After they purchase their plot of land, they can start building the house from scratch.

Now of course, the more complicated the process is to build the house, the more resources and manpower that they have to put into the game. But I could see this being a major selling point of the game.

I believe that player housing has the huge advantage of allowing a player a personal space within the game that they can customize however they wish. However, I would also like to see Linkshell houses that are larger than what the players can obtain and would cost a very large amount of money to produce. These houses could contain facilities for crafting and other cool things people would want. These halls could also contain Linkshell management functions and group crafting facilities. They could house the Linkshell bank. Of course systems would need to be put in place to prevent abuse of these linkshell halls and the bank, but this could be a very interesting and bring quite a bit to the game. Individual Linkshells could compete to see who could build the most valuable house.