Interesting. I certainly would not want to see any more of this; it is an affront to the idea of freehold. It is unavoidable sometimes (e.g. if you need to build a railway) but it is totally wrong to do it as a method of changing round a residential layout you just happen not to like or building a shopping centre.
Of course if it's not a nice area, what would be morally better would be to make excellent, above-value offers to the residents, or even consider offering them quality temporary rental accommodation and one of the new units for free which they might then take voluntarily. That's a morally acceptable way to achieve the same thing, but with less developer profit. Almost invariably, compulsory purchase leaves the former owners in a worse position than they were in, often unable to afford an equivalent replacement.
Mass redevelopments happened quite a lot when property values in urban areas were lower. No one complained about freeholds then!
To be clear, this isn't about expropriation either. People would be compensated fairly for their property. If your house is worth £500k on the open market, then you will get at least £500k. You do not lose out financially.
And, unlike CPOs intended to install non-residential infrastructure (e.g. motorways, airports) you aren't prevented from living there either. You just won't live in the same bricks and mortar. If you like living in an area because it suits your lifestyle, your kids are at the local schools and so on, then you can be accommodated in the redeveloped area too.
This process would only happen in areas where the current supply of bricks and mortar does not meet housing market demands. As I mentioned above, the quality of living in these areas tends to go
down as this happens, while it can be reset by replacing the housing. Too many people living on a street means too many cars trying to find spaces to park. Redevelop the whole street as flats and you can put in underground designated parking so that everyone has a guaranteed space without it ruining the streetscape.
Flats don't need to be small and pokey either. A driving factor for me and this idea is that Glasgow and Edinburgh don't appear to be struggling to the same extent as places in England with housing. One of the fundamental reasons for that is that people in Scotland are used to living in flats rather than terraces. Most urban areas have a traditional core of tenement housing, so it's very straightforward for developers to come in to build and sell/rent out more of them. While the flats for the working classes were very small, including single end rooms, the basic outline of tenement living applied all the way up to the upper middle classes. There are tenement flats in Hyndland and Morningside with 4-5 bedrooms, grand cornices and stained glass windows of equal prestige to those in detached and semi-detached villas elsewhere in the city. Flats in the Georgian New Town can be worth millions.
So, you could build flats which are actually larger than the properties that were demolished to make room for them. You can still have ground floor flats with direct garden access, then flats with private balconies above.
The specifics of the development aren't really as important as the principle. The railway has at least some interest in solving level crossing problems on busy commuter routes, and this could be the most economically efficient way of fixing it for everyone. The only people who actually lose out from this are people who would refuse to sell their property at market value, and only then to the extent that they lose the bricks and mortar they currently inhabit rather than any economic value. Everyone else wins - the country, the local area, rail passengers, and the other owners who are happy to sell up.