The only effective solution to a HOSP invasion is to trap and permanently remove the HOSP from its territory. Giving the HOSP a nestbox of its own will NOT work. It will try to take over both nests, and is not likely to leave the Bluebirds to nest in peace.
Because HOSP will nest in close proximity to other HOSP, it is not possible to saturate an area with enough boxes so other species can safely nest. Quoting from the North American Bluebird Societys website: Since House Sparrows are classified as pests and are not protected by federal law, they should be quickly and humanely dispatched as soon as they are captured. This is what is referred to as "active" sparrow management.
There are passive methods of control, described above, which basically amount to discouragement tactics. These may suffice in some instances, but be aware that just ONE determined male House Sparrow can destroy a Bluebird nest, killing the babies and perhaps the adults, in a matter of minutes. It is ... more.
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