The general tendency of UCs (and many other primarily residential universities) to have frosh living in the dorms but upper class students moving to nearby off campus housing can pose issues of social integration for traditional residential transfer students, who may not fit in as well in mostly-frosh dorms or find a ready-made social group in off campus housing. (Non-traditional students tend to have different needs and wants, whether frosh or transfer, although they tend to be more common as transfers.)
It is not obvious what the solution is, from either the perspective of a traditional student who would prefer the ready-made social group going in (but may not fit in well as a junior in a mostly frosh dorm), or a university that does not have the resources or student desire to have campus housing for all class levels.