Sure I've seen this mentioned before, but being able to demolish buildings kinds of sucks. In real life, this would incur huge cost, legal battles and pressure for the authority. I'd propose:
- Demolishing a building has a cost - this should reflect the land value, lot size and length of tenure. Eminent Domain / CPO is costly, you're buying the land, compensating the owner, undertaking legal and consultation process. Potentially different impacts by usage type. This shouldn't be free.
- Impact on demand - "I was thinking about moving to this city, but they keep demolishing houses and evicting residents?" the cost of uncertaitny - this should impact on people and businesses. Clearly this impact isn't cumulative i.e. they've demolished 18 houses in the last 40 years. The impact would weaken over time. The impact should span people and businesses though - if tons of businesses are being demolished by the authority, people fear for their jobs and might look to leave.
- Trade-offs - citizens realise it's not always easy. If you're delivering a major project which will address education need, provide more housing, healthcare. this will obviously counter the impacts, but if you're doing it for a funky idea that will look cool, it's gonna hurt.
- Some kind of "regeneration" marking policy - this would basically serve to mitigate against the above with some kind of time factor, perhaps alongside financial incentives to encourage residents / businesses to move elsewhere.
I'm sure there are more impacts, but these were the first few that sprung to mind. I could see how you could build an interesting Planning and Construction orientated DLC with this at the heart, alongside industries / buildings / road types / new animations?