Yes, that's a good summary of the bad idea. Again, this is a bad idea because it discriminates against one tiny sliver of the resale market (those that want to buy old houses because they like the area the land is in and tear down the house to build a new one). It's not going to work. What you are going to cause is that tiny sliver of people to say "ok, how much do I have to keep to call this a reno and get it through the system?" and then keep that minimum. You are also going to cause an expansion of the government to deal with this new level of regulation, increasing everyone's costs and making us worse off for no discernible benefit because this deals with a part of the new house pipeline that isn't the problem.
The problem is that in most of these place no matter what one does one is still stuck with low lot coverage and low allowable unit numbers (i.e. in my city the overwhelming majority of residential tops out at 45% lot coverage, 15 meter heights, and one unit maximum (a small chunk of the overwhelming majority zoned this way allows 2 units in a restrictive manner as either garden/over garage or basement suite). So instead of wasting resources increasing regulation, the solution is to decrease regulation. rezone all this stupid stuff to allow much higher lot coverage, height and unit count and then approve everything that fits in the zoning in a short period of time rather than dragging it out for months and months through bureaucracy. You get smaller, cheaper government (big win), faster development of the available land (huge win) and you refocus the large contingent of businesses currently focused on buying old single family in places zoned for 2 units, subdividing and building two units onto building much bigger, higher density things like multi unit walkups in the same space raising the unit count from the current max 2 units to 4-10 units on the same piece of land. This will solve most of the problems while giving people the freedom to do what they want (but the incentive to do what is best for society) vs decreasing freedom for no benefit and moderate harm.
The problem is that in most of these place no matter what one does one is still stuck with low lot coverage and low allowable unit numbers (i.e. in my city the overwhelming majority of residential tops out at 45% lot coverage, 15 meter heights, and one unit maximum (a small chunk of the overwhelming majority zoned this way allows 2 units in a restrictive manner as either garden/over garage or basement suite). So instead of wasting resources increasing regulation, the solution is to decrease regulation. rezone all this stupid stuff to allow much higher lot coverage, height and unit count and then approve everything that fits in the zoning in a short period of time rather than dragging it out for months and months through bureaucracy. You get smaller, cheaper government (big win), faster development of the available land (huge win) and you refocus the large contingent of businesses currently focused on buying old single family in places zoned for 2 units, subdividing and building two units onto building much bigger, higher density things like multi unit walkups in the same space raising the unit count from the current max 2 units to 4-10 units on the same piece of land. This will solve most of the problems while giving people the freedom to do what they want (but the incentive to do what is best for society) vs decreasing freedom for no benefit and moderate harm.