At the end of the day if people want to hold themselves hostage to ensure that they don't lose their in-game house then that is, ultimately, on them. The ideal solution would be for everybody to have access to player housing - which could be done in a number of different ways. Perhaps the most efficient method would be to expand the size and functionality of apartments.

Until that happens the demolition function is a necessary evil. To be honest, I think there's a lot of people who don't even use their house very often and simply keep a hold of it for the sake of bragging rights. When I owned a house in-game I never saw my neighbours...nor did I ever see them shift their decorations around to suggest that they were actively using it and adding new furnishings that happened to take their fancy. I'd take a peek every now and then to check out of curiosity. Obviously they were entering their house to prevent the timer from expiring, though they didn't seem to actual do much with the place beyond that.