Spending less on housing has tremendous value for the people who benefit from it, including the ability to pay for better medical treatment, and lead an overall happier life. It's unclear what evidence you have that the net effect would be an increase in the overall number of deaths, or - more importantly - human suffering.

Other than that I do not really understand your "astonishment": you've artificially constructed a personal axiom that has never applied to human society - namely that people should care equally about every casualty, regardless of circumstances or causes, or the impact of those causes on society as a whole - and are then surprised that others don't follow this model.