But when they buy cocaine they still contribute to the income of local dealers and the activities of gangs. Their money may well put a gang leader's kids through college. And drug lords can have huge weddings as well.

It seems to me like you as well fail to see the downstream consequences of that spending.

I do agree that building a house and letting it sit empty is usually slightly better than spending the money on drugs, but that can easily reverse itself depending on the specific building materials and drugs in question.

More importantly, there are not just two alternatives. Why spend money on a house you don't need and pat yourself on the back for helping the people you paid, when you could have used the money much more efficiently to directly improve people's lives?