There are those times where people do things that appear so stupid you hope they have malicious intent just so you can believe that people can't be that stupid. This is one of those times.
The student village that I live in is in danger of being shut down. Not because it doesn't make enough money, it is the only student hall that makes a profit. It's not because people don't want to live here, it gets the highest ratings every year out of all the halls. It is because people in charge do not want to admit they have made a mistake.
Years ago, without doing any research "Commercial services" decided to build new student halls. They call them grad pads because they are all private studio flats instead of shared halls. But to make them affordable they are tiny, made of cheap plastic looking material, and as many are crammed into a building as possible. Of course since they cut every corner the elevator does not work good and Internet is very flaky. The best part is that it costs £1000/month ($1500) to live in these shoe boxes. Obviously, they can't keep them filled even the first year it is open. They have another building being built right now to add to the vacancies.
So the current halls where the rent is half as much (it is further away) and has a waiting list is being shut down. Not because anyone is expecting students to fill in the spaces in the empty halls because of the price difference. It is because without this village showing how badly they blundered open grad students just look like they don't want to live in student halls instead of reality.