Take that to its logical conclusion, aog. Scumbag does crime, goes to jail, state confiscates half his house. He comes out of jail and moves back in with wife. What's he lost? And on top of that, why would he bother to maintain the state's assets?
Let's suppose, however, the state says it's his, bought with the proceeds of crime and boots the entire family out. Then we have to finance housing them.
The courts already have the power to make somebody criminally bankrupt. I suspect that, as Douglas has suggested, this is a bit of political spin.