The Wall Street Journal reports today that the town of Avondale, AZ, will use a $2.5 million grant from the federal government’s “Neighborhood Stabilization Program,” signed into law by the president in July, in part to “build two additional rental units for low-income families.”

OK — building two houses is a small part of the grant. Still, though, it seems inconceivable that anyone would think that a major problem Arizona faces today is that there is not enough vacant housing.

It’s also not clear that it’s a wise strategy for cities and towns to use some of the grant money to finish half-completed or already deteriorated new subdivisions, as some seem to be planning to do.

A trip to some of post-Katrina’s hardest-hit neighborhoods easily shows how easy it is for abandoned real estate to go back to nature.

The best thing for the hardest-hit and most overbuilt real-estate markets may be to let some of these suspended projects do the same. Here, doing nothing could work quite well.