If the on-campus buildings are full then their prices can't be pushing people off campus on the net. The prices may push
some people off campus, but if the buildings are full then that shows that students are willing to pay the higher prices and aren't spreading into the community as a result of them.
There are two separate questions / objectives at play here:
- Colleges should build housing to minimize the housing cost for their students; and
- Colleges should build housing to minimize the impact of their students on housing in the neighboring communities.
I feel like a lot of debate on this forum is Person A focusing on 1 and Person B focusing on 2, and them talking past each other.
The case can absolutely be made that colleges are failing at objective 1 by building "luxury" (a term I absolutely hate) dorms. But those "luxury" dorms are NOT failing on objective 2 as long as they are full of paying students.
I'm inclined to care more about 2 than 1, so I'm fine with high-cost dorms. But if your concerns are more on 1 than 2, then yes, high-cost dorms may not seem appropriate.