Cameron announces big government ghettoization plan?

The demand for 'social housing' exceeds supply so to try and ease it, the Tories want to, in effect, allocate said housing according to a means-test. The thinking behind this is that presently council and housing association properties are occupied by people who don't need them whilst those who do languish on a housing waiting list. Hence this idea of temporary tenancies.

Might seem not entirely unreasonable but there's at least two problems with it:

1) It would further homogenize council estates. Someone getting a job when they had been previously unemployed or getting a promotion or something has positive externalities in the form of extra dosh to spend on local services, for example. Under Cameron's plan, one presumes, as soon as a person's income rises above a certain threshold, they'll be punted out. It could surely serve as a disincentive and would therefore produce less, not more, 'social mobility'?

2) Central government, yet again, seems to be throwing its weight around rather a lot in the 'Big Society'. Cameron claims that it would be for councils to decide whether they would implement this scheme but one wonders how those deemed to be distributing scarce resources inefficiently might fare in future allocations of central government funds. The notion that 'council tenants could be forced to downsize' reinforces this impression. Kinda grates when it's coming from someone who doesn't appear to know how many homes he owns.