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Why, then, is there any need for the initial housing lottery?
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It's not how it used to be -- when freshmen were not required to live on campus, everyone was assigned a random room on campus and final housing assignments were made after a week of rush (which at the time included fraternities, sororities, and independent living groups).
When the change was made to house freshmen on campus, the policy of a housing lottery the summer before freshmen arrived was implemented.