Exactly. And what public policy needs to do is revoke the non-profit status of schools that fail to make any effort to expand despite having an abundance of resources and qualified candidates.
Harvard could easily accommodate 20,000 undergrads given the size and quality of its applicant pool. That fact that it doesn't spend a penny of its $30 billion endowment doing so reveals that its mission is brand management, not education. And that's perfectly fine. But it shouldn't enjoy a tax-advantaged status predicated on the make-believe that its a philanthropic organization.
Increasing the class size would be good.
But Danny Rubin isn't going to be able to teach screen writing to 120 kids instead of 12, even if he actually wanted to. RJ Tarrant can't expand his personal Classics section beyond 15.
And the undergraduate animal transplant surgery class (12-15 students)? How, pray tell, will that scale? If you wanted to 10x the size of the class... I don't know if there's a single place on Earth that conducts 10 transplants, human or large animal, in one building, at the same time.
Not everything can be scaled. Not even "not scalable" things can be scaled with money, even a lot of it.
A more interesting conversation is why nonetheless billionaires do a bad job at education, despite (not because of) all the money. I think this thinking is part of it. It also shows a lack of understanding of what makes Harvard special. It's not just "brand management."
Harvard could dectuple the number of faculty positions, and still turn away a dozen promising qualified academics for every position it fills.
I didn't go to Harvard, but I did attend a comparable fancy lad finishing school. The notion that there's any sort of magic compared to, say, Texas A&M doesn't hold up to scrutiny. The real difference is that the reputational capital of an Ivy League school. Which means that a bunch of impressive people will bend over backwards to become associated with the school.
Which in turn makes the institution itself prestigious. Which then attracts the next-generation of impressive people. Like a social status perpetual motion machine.
Overall, society isn't putting enough money into research. Elite universities hiring more faculty would be a great thing, in my estimation.
(Unstated above is that I believe that undergrad is fundamentally an in-person experience.)
Buy up existing hotels?
The George Washington University has purchased many hotels and condos and converted them to student housing, and that is downtown DC real estate.
Works well when you pay no property taxes.
Under capitalism. :)