Eh, I think housing demolition is more of a workaround that would be unnecessary if actual problems with housing were somehow resolved or never implemented in the first place.
Its main purpose is to prevent inactive players from taking up all of the space and locking people out of a chance to use the housing system at all. Demolition would not be needed if they could somehow solve the severe limitation in the number of available plots on every server, which is the direct cause of people being locked out. And they might not even have that problem on most servers if they hadn't just opened up the system intended for a small number of FCs to individuals without thinking about how that would fill all plots on all servers forever.
Obviously the first problem isn't easy to solve or we wouldn't have been dealing with it for years, and they already failed on the second one. But just tightening the restrictions isn't going to help people use housing, it's just going to cause the owners to rotate slightly more often - the demand will still be greater than the availability of plots.