Why would everyone not then flock to that new ward to bid? I would see in your notion that even those that currently own a small or a medium would ALSO bid against you in your new ward in hopes they can wrangle this new plot type.

In my experience just putting about 40 wards and ditching the workshop connection to housing would probably meet the supply of people actually using housing for living in. A lot of folks I notice tend to get a house...then realize they have zero desire to decorate it. Let alone will spend any time at their home because lets be real - most the playerbase gathers where they can get stuff done such as aetherytes.