7 minute read
How One Homebuilder Helped to Create the Modern American Suburb
American Heritage
Following World War II, Levitt & Sons identified an enormous problem and helped to forge a new industry with their solution
With the rise of American industrialization came a mass migration of families from the rural farms scattered throughout the countryside to the densely-populated cities. As millions of Americans and an ever-expanding influx of immigrants flocked to work in the factories, housing became a serious issue.
In New York City and other large metropolitan regions around the US, overcrowded tenement houses, which were little more than condemned warehouses and other dank, airless, often windowless buildings, became home to these blue collar workers and their families.
While the Roaring Twenties brought a period of peace and prosperity to the nation, conditions changed little for the typical American family on the lower rungs of the economic ladder. The Great Depression exacerbated the situation, creating even more of a vacuum between the upper class and the working poor. It would take a world war, a global economic power shift, and some impressive ingenuity, but the American middle class was about to be forged into existence; and the country would never be the same.
Turning a profit in the Great Depression
While certainly not a member of the lower class, William Levitt was born in New York in 1907 during the heart of the housing crisis. Shortly after he dropped out of NYU to “make a lot of money,” his father Abraham, a real estate lawyer, received a tract of land as payment-in-kind for handling a mortgage foreclosure. Instead of selling the land, Abraham started Levitt & Sons and began building on the property.
The timing couldn’t have been more inauspicious: Levitt & Sons was established literally on the brink of the Great Depression. Savings and loans began going out of business, and banks were suddenly foreclosing on homes at a staggering rate of a thousand per day as homeowners failed to make their mortgage payments. During the height of the Roaring Twenties, over 500,000 non-farm “custom” homes were being built each year in America; in the first full year of the Great Depression, just over 50,000 homes were built. By 1933, close to half of all active home mortgages were in default.
Just 22 years old in 1929, William, who was now in charge of marketing and sales at the company, was full of creative ideas to help the endeavor turn a profit—even under the darkest of economic conditions. Levitt & Sons began buying land which was in foreclosure and started building upscale homes on the properties.
Between 1929 and America’s entry into World War II, which helped end the Great Depression, the company built and sold nearly 3,000 homes priced between $9,000 and $18,500. Quite the asking price at the time, William’s marketing was geared to attract the area’s wealthiest citizens. William’s brother Alfred, who became the vice president of design and chief architect, helped attract this exclusive clientele with unique amenities such as a neighborhood pool, a nearby shopping district, and topline appliances built into the homes.
When the war hit and bans on new home construction were implemented, Levitt & Sons once again showed their business acumen by becoming a government contractor for the construction of housing for service members and their families. Facing the ridicule of industry peers, the company won a bid to build low-cost housing for US Naval officers in Norfolk, Virginia at an astounding rate. Building houses up to this point had been a tedious, one-by-one process with virtually no standardized procedures in place.
William heads off to war
The reason for the ridicule from Levitt’s peers in the industry was evident from the start: supplies would notoriously arrive late, subcontractors would delay promised work, and agreed-upon Navy deadlines were missed. Instead of lashing out at the various parties, William took to the drawing board and created a standardized process for building homes.
In a war environment, action often vacillates between the overwhelming and the mind-numbingly mundane. During many of the downtime hours, Levitt would attentively listen to what his brothers-in-arms looked forward to doing when they got back home to the States. Overwhelmingly, they dreamed of buying a small home and raising their family in a comfortable environment. Unfortunately, when they did actually return home, most faced a nightmare rather than a dream.
Crisis spurs action in Washington
The lack of building during the Great Depression and the government ban on civilian home construction during the war created a nightmare scenario as millions of service members returned home. A special report to the US House of Representatives in February of 1946 warned: “Existing facilities are inadequate to house the large number of veterans returning to civilian life.... To meet the housing emergency there is an urgent need for some 3,000,000 moderately and low-priced homes (to be built) during the next two years. It is now a national tragedy.”
Within three months, Congress passed the Veterans’ Emergency Housing Act which worked to assure critical materials went to the homebuilding effort, and that wartime factories were re-purposed for home manufacturing needs.
The Serviceman’s Readjustment Act, otherwise known as the GI bill, began offering veterans 30-year mortgages (a length unheard of to this point) at a rate not to exceed 4.5%, and VA/FHA loans were put in place which would be guaranteed by the federal government. Before the advent of the FHA, would-be homeowners had to put down as much as 50% of the asking price to get a loan; suddenly, veterans were buying houses for literally no money down. Of course, this did little to change the fact that homebuilding still moved at a snail’s pace.
Levitt’s creative mind saw a golden opportunity.
Levitt’s creative and attentive mind saw a golden opportunity. The company had proven it could build homes rapidly; now the government was also primed to act.
The reverse assembly line process creates the modern homebuilding industry
William Levitt was obsessed with the desire to reinvent the nascent housing industry, and he fully understood the folly of building unique homes one at a time. What seems like common sense today was impugned by an industry stuck in its ways. Like all pioneers, he faced the wrath and forged ahead.
Impressed by Henry Ford’s use of the assembly line to build cars at a record clip, Levitt found his template. Obviously, homes couldn’t move down a factory floor like Model-Ts, so he adapted the idea and created his reverse assembly line process.
In short order, Levitt & Sons purchased some 4,000 acres of potato fields in Long Island, New York. The company then got to work on what would be the largest private housing project in American history: Levittown.
Constantly refining the process of moving workers rather than the products, Levitt was soon churning out as many as 30 finished units per day, complete with in-home appliances, curving streets, and gorgeous landscaping. Veterans couldn’t buy their new dream homes at a faster clip, and soon Levittown was a bustling region of 17,000 families. The great migration to suburbia had begun.
By 1951, Levitt & Sons was the biggest home builder in America, turning a sleepy, cottage industry into an economic powerhouse. Today, four out of five Americans live in the suburbs, with most neighborhoods bearing an uncanny resemblance to those William Levitt and his family created in the 40’s and 50’s. All because one person refused to accept the status quo.
