It's even more ridiculous than that.I hope they checked the idea out with the kids first.
The parent's parents decided to gift each of their two adult children (both married) by offering to pay off their mortgages. One couple still had their $250K mortgage, and apparently had inspired the gift by complaining pretty vocally & regularly about the debt. However the other couple (our acquaintances) had quietly paid off their mortgage and were debt free.
Instead of everyone sitting down and talking through the [-]sibling rivalry[/-] finances of their parents' intent, our acquaintances decided to "get themselves a mortgage".
Dysfunctional families aside, it's a smart move. They could rent out the upstairs apartments with no problem, and ohana floorplans are pretty popular around here. I just hope they went with quality energy-efficient construction & soundproofing.
But I agree with you-- it's never good to give your kids an incentive to move back home.