Demolitions are already in-game and proven to work. We could dream about there being enough plots for everyone, but that's at the moment just day-dreaming. Yoshida is adding more wards, more housing zones, slowly increasing supply, which helps but clearly it's not enough on its own, so additional systems are needed to redistribute the limited supply. Removing houses from inactive players is the first partial solution in the line. Losing a plot is not end of the world, you can always get a new plot eventually - as long as there are features like the demolition. It seems harsh that inactive players lose their houses, but that also makes it easier for them to replace said houses if they decide to return to the game.