I wonder if the following could work:

Provide a small number of open world hardpoints that can be purchased, developed, and then opened for instanced housing, with whatever is constructed in the open world as the common area.

That would allow players to live outside NPC towns, even in dangerous zones. It could also allow for community projects to improve the open-world development common area that all the instanced housing is connected to (and which would appear as the open-world visual for any travelers wandering by).

So, while there might only be a few such hardpoints scattered across the maps, they could each theoretically host an infinite number of instanced houses, and it seems unlikely that they would go stagnant, while at the same time those living there would likely take pride in the open-world appearance of their settlement.