Why does NYU get to take up so much space in the city?

After visiting New York for the first time, I was puzzled why a college can be so incredibly massive and take up so much space in a city that’s so crowded. Why does one college get to spread out across an entire island? I mean it’s NYU of course they are massive but does one college need to take up so much space in a city where so many of its citizens can’t afford to live there?