My local Council has a policy regarding their mutual exchange scheme, something along the lines of those in larger houses (who no longer need them) who are thinking of exchanging with families in smaller houses that aren't fit for their needs can be offered incentive 'rewards' to do so. I think usually it's things like vouchers or grants for decorating and things like that, maybe increases in housing benefit? I think it's a good idea.. I'm not sure that the new plans to penalise people who are under-occupied are necessarily very nice, but I think they are needed. This is why:
My DH and I used to live in a bedsit when I unexpectedly fell pregnant with DS1. We lived there until he was just over a year old - three of us in one room with a tiny kitchen and tiny bathroom. We didn't have heating until just before we moved, we had one of those water heaters which is powered by electricity (very expensive!) and apart from anything else we had no space. DS1 didn't learn to walk properly until just after we moved, although he was able to walk at other people's houses just fine from about eleven months. Our HV thought it could be because at home we had eighteen square inches of floor space for him to move around in. We couldn't have the fridge/freezer in the kitchen because it was too small, so it had to be in the cupboard under the stairs to the bedsit above (still in our property but not ideal). It was torture, most days. I was a wreck, I could barely sleep, I was so depressed. I just wanted a home for my family. We would have taken a one bedroomed flat just to get us some extra space but were told we weren't allowed because we would still be over-crowded!
If I had known, at the time, of someone living in a two bedroomed house/flat who didn't need the space I would probably have camped outside their home every day and begged them to downsize. It's a truly desperate situation to be in and you can't understand it until you've been there. I hope they go about it in a reasonable way and allow people the freedom to choose where they want to downsize to, etc, and to make sure that the space is available for them to do so before they start hiking their rent payments up, but all in all I think it's a good idea.
Apologies for long, waffly post!