Very interesting. I bet that will be a big selling point for people considering this hosting service. Seems that it will be harder to put pressure on hundreds of individual residents, than it is to do so to a big centralized datacenter provider company.
Realistically speaking, I suspect that if this does take off (and it is a very cool idea), they won't actually install those things in living rooms due to noise concerns. Those racks are going to be in the basement where the other heating equipment typically is.
So police are going to get a warrant that is limited to the basement room containing the racks. the home owners will be slightly annoyed and inconvenienced, but they aren't going to put up a fight against the warrant. They'll be more than happy to cooperate with the police.
Even if they want to "raid" my flat-mate, they can't go to my rooms while doing it.