Unfortunately, for many universities, the local community is behind the requirement for many students to be housed on campus in dorms. While I was in grad school at Georgetown, there was a lot of pressure from the local area neighborhood commission (ANC) to house more students on campus in dorms. Basically it was , get your loud, obnoxious (and ironically mostly over privileged) undergrads out of our neighborhood. If I remember correctly, GWU had similar issues with the ANC in Foggy Bottom. As I remember, the ANC would extract promises to keep more undergrads on campus in order to build new facilities on campus or to raise enrollment.
I must admit, that I was required to live on campus my freshman year and had a hell of a good time. (It took a bit to recover, but I did graduate with a decent, but not stellar GPA…) I also remember a good friend who went to Vanderbilt and her boyfriend pretended to be gay to get out of the dorms his Sophomore year…
As it is, I can’t defend all universities in this practice, but I as the essaytyper am sure that many are facing the same issue. It would be nice if the Washington Post would scratch a bit more below the surface to explore these issues. Despite many of the other commenters, there are other issues beyond greed.