While universities themselves might not be “designed to make money,” and most are non-profit institutions, they are generally very concerned about income and about their economic well-being. For perfectly good reasons; if they go broke, they might have to close their doors.
While universities might not be in pursuit of a profit in the same way that a corporation is, they are well aware that maintaining sources of income is essential to their long-term survival, and plenty of universities see dorm rentals (compulsory in some cases, voluntary in others) as a good way to add to the institution’s income.
When i started grad school, my university, John Hopkins, required that all freshman undergrads live in the dorms. A few years later, the university added a bunch more dorms, and it is now required for both freshmen and sophomores to live in university housing. The only exemption to this rule is for those who come from the Baltimore area and who can commute to the university from the house of a parent of guardian. And that doesn’t cover a very high percentage of Hopkins undergrads.
Rates for a double room start at $3,575 per semester, and go up to $4,000. Single rooms start at about $4,100 and go up to $4,500. Freshmen are also required to purchase a meal plan, which is $2,680 per semester. Semesters at the university are under 4 months long, including move-in week and finals week.
So, a student in a double room is paying about $900 per month to share a room for sleeping. A student in a single room is paying over $1000 per month. Plus almost $700 a month for food. And both involve sharing common areas, bathrooms, etc.
When my wife and i left Baltimore two and a half years ago, we were renting a two-story, three bedroom rowhouse with basement, about four blocks from campus, for $1,300 a month.
I don’t know exactly what Columbia’s situation is, and rents are obviously much higher in New York City than in Baltimore, but some universities make good income from their on-campus housing. This money is not profit, per se, but it is money that the university can then use for other things.