Is it useful for engineering students to work on projects with local communities?

Yes, depending on the project and your role, it can be a useful experience. Working on actual local issues can provide practice in applying engineering knowledge learned in class, defining problems, communicating with residents, and considering proposals in light of social and safety-related constraints. The learning and workload vary by the activity, supervision, and level of involvement, so it is worth checking whether it fits your interests and available time.