The Lustron Home

One of the most ambitious attempts at large-scale housing production.

When WWII ended, the US was facing a housing emergency. Production of housing had largely stopped during the war (and had been severely reduced since the great depression), and the US now faced the problem of needing to find homes for millions of returning GIs. As a response, there were several large, well funded efforts to rapidly build the needed housing. One of the most impressive, if ultimately unsuccessful, was the Lustron Home.

Origins

Lustron was founded by Carl Strandlund, a general manager of the Chicago Vitreous Enamel Corporation. Chicago Vit made enameled steel - steel panels covered in porcelain. Originally used for appliances such as refrigerators and dishwashers, Chicago Vit eventually expanded into the building materials market. Enameled steel’s durable, low-maintenance surface was perfect for signs, storefronts, and exterior cladding. Standard Oil would use Chicago Vit enameled steel as the exterior surface for 600 of their gas stations [0].

During WWII, commercial building had essentially been put on hold. Chicago Vit spent the war years manufacturing tank armor [1]. When the war ended, orders began pouring in for their enameled steel. But Chicago Vit couldn’t obtain the material to produce it - steel was still under wartime production board restrictions, and thus unavailable. Strandlund visited Washington DC in the hopes of getting the restriction lifted.

Strandlund was unsuccessful - the government had earmarked nearly all building materials, including steel, for the production of housing. However,  if Chicago Vit’s enameled steel could be used for the production of housing, allocation would be possible. 

Strandlund had previously toyed with the idea of a steel-enameled house as a way to expand the market for Chicago Vit’s products. Returning to Chicago, with the help of a local architect and steel fabricator, he quickly came up with a design and built a prototype for an enameled steel panel house. Returning to Washington, Strandlund was eventually able to secure a $12.5 million loan from the Reconstruction Finance Corporation, as well as the lease on a former aircraft manufacturing plant [2] in Columbus, Ohio. The Lustron corporation was born in October of 1947.

The Lustron Home

In many ways, Lustron’s homes were typical by the standards of the late 1940s. The first and most popular model, the Westchester, came in 2 or 3 bedroom options, a single bathroom, and was just over 1000 square feet, similar in size to a Levittown home. They were built using steel-framed walls, which supported a steel truss roof. Hundreds of steel enameled panels and tiles would be screwed into the steel, forming the interior and exterior walls and roof.

Houses arrived at the jobsite in a partially assembled state. Wall panels would have the structural steel, windows, and a limited amount of services installed in the factory. Walls and trusses would be erected over a concrete slab, and the enameled panels forming the interior, exterior, and roof cladding would then be screwed into the structural frame. Specially-designed panel joints and vinyl gaskets between the panels and the structure created the building envelope, preventing water from getting in and heat from getting out [3]. A house could be assembled in about 360 man-hours, or about 3 days for a typical crew.

The houses were touted as nearly maintenance free, thanks to it’s enameled steel construction. For heat, they had radiant heating built into the ceiling, and a combination dishwasher/clothes washer (that apparently never worked quite right).

House Production

The Lustron Corporation was built from the ground up with mass production of housing in mind, and the factory was no exception.

The Lustron plant was a behemoth. Built in the left half of a former aircraft factory, it consisted of over a million square feet of factory space, and was designed to produce huge numbers of homes - 100 a day or more, 30,000 a year [4]. To do this, it was equipped with 161 presses of various sizes (the largest weighing 1800 tons), 201 portable electric welders, 67 paint spraying booths, 11 furnaces, and 40,000 feet of overhead conveyor. 

Each Lustron House contained 3,000 separate parts, 16,000 welds, and 7,000 square feet of enameled surface. The first models weighed 35,000 pounds, and manufacturing took about 400 man-hours. At its peak, the factory employed over 2000 people [5].

The first house was transported in 250 crates, and took 3 separate trucks. When the cost of shipping came back as $4500 (as much as the cost to manufacture the parts), the packing was re-worked until the parts could fit on a single 35 foot truck.

Racks for handling panels in the Lustron Factory

The first Lustron house rolled off the factory line in April of 1948. By October, it was producing 4 houses a week (less than 1% of it's theoretical capacity), nearly all of which were demonstration homes. By February 1949, when the first sales models were available, production had increased to 15 houses a day, and Lustron employees numbered 3200. By May, it had produced 450 houses.

As production ramped up, efforts were being made to streamline the production and assembly process. Carl Koch, architect and designer of the prefabricated Acorn House, designed a new model for 1950 that reduced the number of components from 3000 down to 37, and reduced the weight from 12 tons to 9. It also featured standardized parts that could be arranged into a variety of different configurations.

Sales

The original Lustron Home had a selling price of 7 to 9000 dollars, depending on the model and options chosen and the delivery distance. This was similar to the price of a Levittown home [link], though this didn’t include site erection and installation costs (foundation, utilities hookup, etc.) which could add another 2-3000 dollars. And it didn’t include the cost of land.

While the factory was being tooled up, Lustron drummed up orders with an enormous publicity and advertising campaign. Demonstration homes were set up around the country, which drew tens of thousands of visitors. Ads were taken out in Life Magazine , Time, and the Saturday Evening Post. It made the cover of architectural magazines like Architectural Forum, and positive reviews were featured in the New York Times and the Washington post. Hundreds of thousands of inquiries poured in about the home (thanks in part to the tight housing market of the late 40s). 

Lustron’s sales model was based around selling through independent dealerships, similar to cars. At its peak, there were 234 dealerships in 34 states. From it’s Columbus factory, the Lustron home could be shipped anywhere east of the Rockies, though transportation charges increased with distance.

End of Lustron

In less than 2 years Lustron built one of the most advanced housing factories that had ever existed. But within 6 months, the company would close its doors.

Lustron was financed by the Reconstruction Finance Corporation, a government corporation originally founded to make loans to banks and other businesses during the great depression, and was expanded during WWII to finance the construction of munitions plants and wartime R&D [6]. Following the first loan, Lustron returned to the RFC again and again as startup costs mounted. Lustron received a total of 6 loans, totaling $37.5 million (over $300 million inflation adjusted).

Almost as soon as the loans were granted, congress began to question why so much government money was being granted to a private corporation, especially one that had put up such little capital. Lustron’s private investment totaled less than $1 million, less than 3% of its funding. And because he secured almost all of the voting, class B shares, Strandlund himself controlled the entire company despite having invested only $1000.

Congressional hearings were held in August of 1949 as to how the RFC’s money was being spent. Articles in publications such as Newsweek began to appear questioning why the RFC was lending so much money to a private company [7].

At the same time, despite the positive attention and reviews, Lustron was having trouble meeting it’s production targets. It needed to produce around 35 houses a day to operate profitably, but production peaked in August of 1949 at 26 units a day, which soon dwindled to 6 units a day in October. It’s unclear the reason - it may have been the specter of corruption, or the government investigations. Or perhaps it was the ever-increasing price. Unable to manufacture the homes as cheaply as it expected, the cost gradually rose to $10,000 or more, far beyond what a comparable house at the time cost.

Part of Lustron’s problem was it’s dealership structure. Lustron expected to be paid immediately when an order was placed, but buyers would take up to 60 days to secure a mortgage. The result was that dealers needed around $50,000 of working capital to handle even 1 order a week.

Lustron planned on funding this with yet another loan from the RFC. But it was not to be. The RFC, after much back and forth, rescinded Lustron’s loans, forcing the company into bankruptcy. They foreclosed on Lustron in February of 1950. The plant continued operating until May 5, and was then given to North American Aviation. The machinery was sold at auction, and Lustron closed its doors.

What Went Wrong?

Lustron was one of the earliest efforts at large-scale prefabrication. As such, they encountered every difficulty that large-scale prefabrication faces:

• The extreme expense of transportation.

• The inability to completely eliminate site costs, which have an outsized impact on the cost of the building

• Failing to achieve a level of production that would justify the massive upfront cost of a high output factory.

• Inability to be cost-competitive with traditional site-built construction, and trying to compete on other merits.

Other than transportation, Lustron never really managed to address these.

And in their efforts to scale up rapidly, a lot of their funding was poorly spent. They spent millions on custom-designed trailers that were never delivered, apparently without anyone at Lustron noticing (the trailer manufacturer would later be accused of fraud by the RFC). And instead of buying bathtubs for their houses, Lustron bought a massive press to fabricate their own. The press was capable of producing far more tubs than Lustron could use, and the tubs it produced were of a non-standard size, making it difficult to sell them to anyone else. The huge investment thus mostly sat idle.

It’s tempting to think that all Lustron needed was a source of funding with a longer time-horizon, one who could have handled years of unprofitability as the business scaled up and the kinks in the business model were worked out. Rebuilding an industry from the ground up takes an enormous amount of time and money, which Lustron never really got. It took Tesla 18 years, 600+ million in private funding, and billions more post-IPO before it first eked out a profitable quarter.

I think it’s likely in different circumstances Lustron could have prospered in the late 40s/early 50s housing market. Many other prefabricated homebuilders did. But even though they staked out a sort of unique location on the component size/level of completion axis, there’s not much evidence that they cracked the fundamental issues.

A building system for homes based on steel and custom-fabricated enameled panels is fundamentally an expensive system, and would have been a constant headwind. If homebuilders using inexpensive stressed-skin wood panels like Gunnison Homes couldn’t change the homebuilding status quo, it seems vanishingly unlikely Lustron could.

Legacy

Over the years, there have been hundreds of prefabricated housing companies. But Lustron remains one of the few attempts at TRUE housing mass production [8].

During its short lifetime, Lustron built 2680 homes in 36 states. By all accounts, people were very satisfied with them. Despite being new technology developed outside the building industry (Lustron apparently employed mostly car designers), the homes proved to be as long-lasting and maintenance free as advertised. The biggest complaint seems to be that you couldn't hang pictures with nails. Estimates as to how many remain vary, but it seems to be around 1200 or so, roughly the average attrition rate for housing. Many still have their original siding and roof tiles. This is impressive - naively I would have expected a high number of failures related to water intrusion, given the number of connections and joints in the exterior cladding.

The surviving homes illustrate a fundamental problem with non-standard, prefabricated construction. Lustron homes are difficult to remodel or repair. The pieces were all custom - when things like gutters, roof tiles, or tracks for sliding pocket doors wear out, it’s impossible to get replacement parts. Builders aren’t familiar with the homes, making it harder and more expensive to get someone to work on them. Even painting them is nearly impossible, thanks to the enameled surface.

Deviation from a standard means not being able to take advantage of the infrastructure that exists to support that standard, and acts as kind of a maintenance tax that can be substantial - even on a maintenance-free home. The result is that most of the remaining Lustrons look similar to how they did in 1949.

[0] Chicago Vit wasn’t the only company using enameled steel architectural panels. White Castle had a whole division of the company dedicated to prefabricated buildings using the material, which still exists today.

[1] Strandlund was awarded a medal for an innovation which dramatically increased the production rate of the armor plates. 

[2] To give an idea of the scope involved, the original factory that Strandlund tried to secure was the former Dodge Chicago Aircraft plant, the largest factory in the world.

[3] The vinyl gasket helped address one of the largest problems of steel as a building material, it’s high thermal conductivity.

[4] At one point, Strandlund boasted that the factory could theoretically produce 400 houses a day

[5] Back of the envelope math suggests it would have required 5000 employees to operate at full production, assuming a normal 8-hour shift.

[6] The RFC was largely responsible for the development of a synthetic rubber industry in the US.

[7] RFC would be disbanded just a few years later amid accusations of corruption.

[8] Others would be some of the British postwar prefabs, and perhaps some of the Soviet precast apartment construction.