We had been pushing for it very hard when I worked at my undergrad, but it didn't become a reality until a few years after I left. They didn't call it gender neutral housing, but flexible housing. The only stipulations to it were that it was not open to freshmen, and you had to know who you wanted to live with and request the same space together. I think they wanted to block out whole suites for it, so you basically had to get a group of 4-6 people together who were all on board.
The biggest argument against it is that it would open the door for romantic couples to live together, which would be a headache to reassign if they were to break up during the school year. They actually separate the flexible housing assignment process from the normal assignment process and have a separate contract addendum for it. Last I checked, I think they were also having face-to-face meetings with the students that wanted to live together to ensure that everyone was on the same page and understood what their options were if it ended up not working out. From what I have heard, they actually have fewer issues (relative to the non-flex housing population) with the students in flexible housing seeking mid-year reassignment.
It's really a good move, and not just for transgender folks. A lot of schools bar married couples from living on campus, so this would help improve accessibility for them. Disabled students sometimes have caregivers of the opposite sex, and it would help a lot to be able to room with that person. Even the larger LGB community. It may feel unsafe to live with an unknown person of the same sex, and you may not have any options among people of the same sex that you do know. Having more options of who you can choose from will make students more likely to stay in school, stay on campus, and stay involved in student life. All wins.
The hurdles that people seem to think exist in order to make this a reality are very, very small.
