They are offered two options. One is getting an apartment somewhere on the outskirts of the (vast) city, but the size and number of rooms will be the same or better as in the old apartment. The other is getting an apartment nearby in a newly built house, but likely smaller, with an option to upgrade it to a better apartment by paying the difference at a discount rate.
While this is not ideally fair, I like that a choice is offered.
You're basically giving up an 80sqm flat in a small building for a 50sqm flat in a large building. The former is way, way more valuable in most cases.