I hadn't thought of this until a couple of posts in this thread, but once I read them I thought it's a great idea:

Create apartment buildings in major cities like Bree, Michel Delving, Thorin's Hall and Celondim. They could be "instanced" like the current neighborhoods so that if there are 12 apartments in a building (perhaps four to a floor and a building three floors tall) you could use a "pass key" to get into a separate instance, and the number of instances could be whatever is needed according to demand.

If you had a three story apartment building in Bree I bet you could have 100 instances accessible via pass keys and they'd all fill up in a matter of days, unlike the remote neighborhoods that frequently have a lot of empty houses in them.