Correlation DOES NOT indicate CAUSATION. Yes, an increase in racial conflict may correlate with the implementation of AA policies, but one must eliminate all other possible causal variables before arriving at the conclusion presented above. Plainly speaking, Sowell's argument lacks cogency! He might be able to sell that s**t to an uneducated redneck from Alabama, a fellow self-loathing black person, a selfish educated bigot, etc. But I know better.
I'm quite aware that Correlation != Causation. The sudden emergence of racial acrimony after AA policies have been implemented in one area doesn't allow one to definitively conclude that the policies were the cause of the acrimony. Like you mentioned, the greater numbers of people in the AA-favored groups could account for this increase in conflict. This is definitely another plausible explanation for this sequence of events, and I wouldn't be honest if I didn't take it as a possibility.
However, if you take into consideration that similar consequences have occurred when AA has been implemented in other cultures around the world, and in many of these cultures, members of the favored group had been present in the AA-implemented institution prior to the implementation of AA without sparking racial acrimony, then it's more likely that AA is the cause than the presence of members of the favored-group is the cause.
I can't really give you conclusive proof, but I thought this argument would at least make plausible sense. I was pretty convinced by it when I've also taken into consideration other things I've read about the topic of AA, but you may not be.
There was more to Sowell's argument against AA in that book, but because I only read up to that part (since I was browing the book preview on amazon.com, rather than a physical copy of the book), I can't tell you what more there is.
Living with a white ex-KKK member wasn't so bad. I was STRONG, and we eventually had a stand-off LOL
. He couldn't take the "heat in the kitchen," so he moved out, leaving the room to me for all of spring quarter. I was in HEAVEN! 
I'm surprised that the administration of your school didn't step in. Honestly, that would probably be one of the most awkward living arrangements you could force two people into.
On a side note, even though racial bigotry is largely a social taboo in the United States, it's still very prevalent in Asia. Several Singaporean managers in my company have mentioned that they thought Black people were more related to animals than non-Blacks, citing, as evidence, the prevalence of Black people in professional sports (as to these managers, more "animal" persons would have greater physical attributes than less "animal" persons) and lack of intelligent Black people.
What's really surprising is that these managers are in their mid-30s, and by no means ignorant of the world, although they may be ignorant of the achievements of Black people.
My girlfriend mentions that this set of beliefs is also somewhat prevalent amongst the Mainland Chinese. And, from an article I read about what Hines Ward had to endure as a Blasian who had grown up amongst Koreans in the United States, similar beliefs may be found amongst the Koreans.