FFXIV does a good job with housing content and still manages to deliver new dungeons and raids almost every patch. I'm not sure why people have bought into that false dichotomy (probably because Blizzard kept peddling it during development of WoD, the most content-light expansion in the game's history to date, to cover their asses) but if the development team isn't wholly incompetent, it's entirely possible. FFXIV's only problem with housing is that there's not enough plots to go around, something they try to periodically address (and if you can keep up an FC room, an Apartment, and a Small House, you have four rooms to decorate, more if you get a Medium or Large house and use walls to break up each floor into separate rooms).
"It will cost a raid tier!" No it won't. And if it does, fire your environment artists for incompetence and hire people who can get work done on a decent timetable.