Why Levittown Didn't Revolutionize Homebuilding

Prefabbed components and appliances for a Levittown home.

For decades, people have tried to bring mass production methods to housing: to build houses the way we build cars. While no one has succeeded, arguably the man that came closest to becoming “the Henry Ford of homebuilding” was William Levitt, with his company Levitt and Sons. Levitt is most famous for building “Levittowns,” developments of thousands of homes built rapidly in the 1940s, ‘50s, and ‘60s. By optimizing the construction process with improvements like standardized products and reverse assembly line techniques, Levitt and Sons was able to complete dozens of homes a day at what it claimed was a far lower cost than its competitors. William Levitt styled his company as the General Motors of housing, and both he and it became famous. Levitt graced the cover of Time magazine in 1950, and Levittowns became a household name.

For a time, it appeared that Levitt might actually sweep away the old way of building and become the Henry Ford of housing through modern mass production techniques. Levitt boasted that he could build more cheaply than anyone else, and for decades Levitt and Sons was the largest homebuilder in the U.S., and probably the world.¹ But Levitt’s success unraveled. By the late 1970s, Levitt and Sons had barely escaped bankruptcy, and it emerged as a small, conventional homebuilder, which it would remain until it went out of business for good in 2018. Levitt himself would leave Levitt and Sons in the early 1970s, lose his fortune after a series of failed development projects in the U.S. and abroad, and die penniless in 1994.

Levitt’s model of large-scale, efficient homebuilding using mass production-style methods worked for a brief window in the 1950s, but by the end of the 1960s a changing housing market and increasingly strict land use controls meant that such methods were no longer feasible. And even at its peak, Levitt likely pushed large-scale building beyond what could be justified on pure economic terms. Levittown was ultimately a response to a temporary set of housing market conditions, not the herald of a new, better way of building.

Origin of Levitt and Sons

Levitt and Sons was founded in 1925 by Abraham Levitt as a real estate development company, with his sons William and Alfred Levitt as vice presidents. The company didn’t enter homebuilding until 1929, when a real estate slump left it with 100 acres of land on Long Island without prospective purchasers. To try and recoup the investment, Levitt began to build houses on the property, marking the company’s first homebuilding venture.

From there, the company built more homes on Long Island: 18 in 1930, another 50 in 1931, and 200 in 1934. By 1935, Levitt and Sons had built 600 homes. Unlike Levitt’s later efforts, these homes were custom designed for upper-middle class buyers. But early on, the Levitts were interested in streamlining the homebuilding process. In 1936, Alfred Levitt paid $10,000 to observe the construction of Frank Lloyd Wright’s Ben Rebhuhn house, and was inspired by its simplified, streamlined design; many of Wright’s design choices, like an open floorplan and a concrete slab instead of a basement, would later be adopted by the company. By 1941, William Levitt had become president, and Levitt and sons had built over 2,000 homes in Long Island and other areas of New York. By this time the company had also changed its building strategy: instead of homes custom-designed for each buyer, it would build pre-designed homes. It also began to study ways of building more efficiently by steadily building larger numbers of homes. 

It was WWII that altered Levitt and Sons’ trajectory and put it on the path to become a large-scale, mass production-style builder. Enormous amounts of housing had to be built to accommodate defense workers, and needed to be built quickly. In 1941 Levitt and Sons was contracted to build 2,350 homes for workers in Norfolk, Virginia. William Levitt would later describe the effort as a “nightmare,” but it forced the company to learn on the fly. While previously the Levitts had been “delighted with the completion of one house,” now the company was laying dozens of concrete foundations in a single day. In Norfolk, Levitt and Sons developed many of the ideas that it would later leverage successfully in Levittown, including pre-assembling walls and roofs, and building foundations at a regular cadence by moving machinery from site to site. While prior to the war Levitt and Sons had taken 12 years to build their first 2,000 homes, at Norfolk it built 2,350 homes in just 18 months.

The birth of Levittown

When Levitt and Sons resumed its private homebuilding business after the war, it entered what would become the greatest homebuilding bonanza the U.S. had ever seen. The downturn in the housing market during the depression, followed by the curtailment of private housing construction during the war, had created an enormous backlog of housing demand. Between 1920 and 1929, U.S. single family home starts averaged 700,000 per year. From 1930 until 1945, the average rate had been less than half that. In 1947 there were an estimated 6 million families doubling up with friends or relatives, and another half million in temporary housing like Quonset huts, converted trolley cars, or grain storage bins.

Adding fuel to this fire, the federal government had created a Veterans Administration mortgage program to help finance homes for veterans, and approved billions of dollars worth of mortgage insurance for the Federal Housing Administration (FHA). Whereas prior to the war mortgages had been typically limited to periods of 3-5 years, and for 60-70% the value of the house, with the FHA and VA programs loan terms were much longer (25 years or more) and allowed lenders to make loans with little or no money down. Levitt and Sons thus re-entered a housing market with both unprecedented demand and readily available financing.

Taking advantage of its wartime experience in building large numbers of homes quickly, in 1946 Levitt and Sons built 1,080 homes in the Westbury area of Long Island, and started construction on what would be a 2,250 home development in nearby Roslyn.

But this was just a prelude for the development that would put Levitt on the map. In 1946, the company began to acquire 7,000 acres of potato farms on Long Island, which became available in part because the “golden nematode” disease was wiping out the potato crop, to build what would be the largest privately-built housing project in American history.

Levitt and Sons broke ground on the first 2,000 houses of this development, originally called “Island Trees,” in the spring of 1947. Demand proved to be so high that a few weeks later it announced that another 4,000 homes would be built. By the time building was completed in 1951, Island Trees, now renamed Levittown, consisted of 17,447 homes and more than 80,000 residents.

Building so many homes so quickly — an average rate of around 10 homes per day — required Levitt and Sons to radically streamline the construction process from top to bottom. First and foremost, Levitt and Sons standardized its product, repetitively building the same model over and over again, and updating it over time as tastes changed and the design was improved. It removed extraneous elements and simplified the design: unlike most homes at the time, Levittown homes didn’t have basements, nor did they have porches. Components like exterior walls and roofs were designed to have as simple shapes as possible (no complex hips or wall jogs), and rooms were arranged so that plumbing lines could be placed near each other to simplify pipe routing. Levitt stated that they designed and redesigned one house model more than 30 times, building and tearing it down each time and spending more than $50,000 (over 6 times the value of the house) before being satisfied.

First Levitt homes at Levittown

At Levittown, the construction process was broken down into 26 separate steps, each performed by a separate crew. Crews would go to a house, perform their required task (using material that had been pre-delivered), then move on to the next house. Within the crew, work was further specialized: on the washing machine installation crew, William Levitt noted that “one man did nothing but fix bolts into the floor, another followed to attach the machine,” and so on. By breaking down the process into repetitive, well-defined steps, workers didn’t have to spend time figuring out what they should do (what Levitt described as “fumbling and figuring”).

In addition to task and product standardization, Levitt and Sons took advantage of machines and mechanization wherever possible. It had its own cement trucks, and operated its own foundation-digging machinery and cinder block-making machinery. Levitt and Sons was an early user of power tools like paint sprayers, power saws, routers, and nailers. The company also made extensive use of what at the time were relatively novel factory-produced materials, like plywood and drywall.

Like any mass production process, the ultimate enemy of building Levittown was delay: keeping construction on track meant a steady, uninterrupted stream of material that arrived at the jobsite exactly when needed. On a typical construction site, as much as half the time was wasted while workers wandered around looking for needed material. In Levitt’s operation, wasted time was close to zero. To ensure timely material deliveries (and to cut out middlemen), Levitt and Sons had its own distribution company, the North Shore Supply Company, which stretched for half a mile along a railroad stop near the jobsite. To avoid delays, North Shore Supply kept a sufficient supply of material on-hand to build 75 houses, and pre-assembled items like plumbing trees, stairs, and cabinets. North Shore was also where lumber was pre-cut to the correct size. By using standardized designs, planned work sequences, and carefully controlled precutting, Levitt and Sons was able to almost entirely eliminate rework during the construction process.

But assuring an uninterrupted flow of material required far more than just owning a distribution company. William Levitt described some of the extreme measures the company went to avoid delays or slowdowns:

We wouldn’t let ourselves be stopped by shortages. When cement was unavailable in this country we chartered a boat and brought it in from Europe. When lumber was in short supply, we bought a forest in California and built a mill. When nails were hard to come by, we set up a factory in our backyard and made them ourselves.

At its peak Levitt and Sons was completing 36 homes in Levittown a day. And the huge backlog of demand meant that housing was sold quickly. Months before the first Levittown homes were completed, families stood in line for the opportunity to rent one (roughly the first 2,000 Levittown homes were built as rentals). On a single day in 1949, Levitt and Sons sold 1400 homes, some to families who had been waiting in line for days. At $7,990 for a 800 square foot home, Levitt boasted that he could sell his houses for $1,500 less than the competition and still make $1,000 in profit.²

Buoyed by this success, Levitt quickly moved to replicate it. Shortly after Levittown, Long Island was completed, Levitt and Sons began construction on a second Levittown in Bucks County, Pennsylvania in 1952, that would also top out around 17,000 homes at its 1958 completion. A third Levittown in New Jersey began construction in 1958, and planning for a fourth in Maryland began the following year.

“Levittown” quickly became a household name, synonymous with rapid postwar suburbanization, loved by some and hated by others. Supporters praised Levitt for giving thousands of Americans the chance to own a home, while others criticized the cookie-cutter Levittown homes as a further intrusion of a hollow consumerist culture and lifestyle. And because, like most merchant builders in the early 1950s, Levitt and Sons only sold their homes to white buyers, Levittown also became the focus of civil rights activism against housing segregation. In their history of the suburbs, Ewen and Baxandall note that the Levittown houses were “debated, discussed, applauded, and vilified nationwide, from newsreels to popular magazines, including Life, Time, Coronet, Harper’s, Reader’s Digest, and Look.”

Levitt and Sons was far from the only builder that tried to achieve efficiencies with mass production-style methods and large-scale construction in the 1960s. Post-war demand was so high that developers around the country adopted similar methods. California, in particular, was a hotbed of housing construction, with multi-thousand home developments built across the state in the late 1940s and early 1950s. Some of these, like the enormous Lakewood development, rivaled Levittowns in size. Levitt-style methods of home construction became so widely adopted in California that the method of building became known as the “California Method."

But while the style was emulated by many, no other builder pursued mass production methods as extensively as Levitt and Sons. In 1960, Levitt and Sons, now the largest homebuilder in the world, went public. It had completed 60,000 homes over its life.

Shift in the housing market

But by the time Levitt and Sons broke ground on its third Levittown in New Jersey, the housing market was shifting. Falling demand meant that construction on the New Jersey Levittown proceeded far more slowly than on previous Levittowns. The first Levittown in Long Island had built over 17,000 homes in less than 5 years. Levittown, Pennsylvania took around 6 years to reach the same milestone. But Levittown, New Jersey would take 14 years to complete, and only 12,000 of its 15,000 planned homes would be built by 1972. And even before ground broke in New Jersey, the company’s fortunes were shifting. Between 1954 and 1958, Levitt’s annual sales dropped by more than 60%, and by the end of the 1950s, its profits had fallen by more than 80% from its post-war peak.The New Jersey Levittown would be the last built in the U.S.

This turn of fortune was due to a variety of factors. For one, record-breaking levels of home construction immediately after the war had greatly reduced the demand for low-end homes, and resales of those same homes were now competing against new construction in the low end of the market. This glut of low-end housing, along with rising construction costs, shifted homebuilding towards the higher end of the market, where buyers demanded somewhat more variety and complexity. And while Levitt had entered the post-war homebuilding market with relatively little competition, by the end of the 1950s competition was fierce.

Another factor which created headwinds for Levitt’s large-scale building strategy, particularly from the second half of the 1960s onward, was the growth in land use controls and restrictions. Immediately following the war, land development and housing construction had been relatively straightforward. Local opposition to new construction was minor and not particularly effective, and local jurisdictions, not wanting to be seen as getting in the way of building homes for veterans, were more than willing to work with developers. On the first Levittown, for instance, Levitt was able to get the local building code amended to allow homes without basements.

But by the end of the 1960s, opposition to new development became much stronger, partially because of anti-growth tendencies within the rising environmental movement. Land use controls became much stricter and more burdensome. Jurisdictions which previously had worked with homebuilders to try and encourage growth were now at best indifferent, and at worst hostile to it. In his history of merchant homebuilding, Ned Eichler notes that “places like Fairfax County (Virginia), Montgomery County (Maryland), Ramapo (New York), Dade County (Florida), and Boulder (Colorado) not only adopted growth limiting programs but imposed absolute moratoria." Levitt’s fourth Levittown³ was stopped in its tracks in 1971 when Loudoun County, Virginia refused the rezoning required, even after Levitt offered to pay for all the new facilities (such as schools) the development would require. The city of Boca Raton in Florida made headlines that same year when it passed a law limiting the amount of housing that could ever be built there to 40,000 units. California became especially restrictive in allowing new home building: by 1975, according to Eichler, “most California cities and counties had growth control policies and procedures of varying restrictiveness.” But while California was an early vanguard of anti-growth policies, the trend was national. A 1973 survey found that 19% of local governments across the U.S. had initiated some type of temporary development moratorium.

Not only did land use controls and development restrictions slow down and prevent new home construction, but they drove up the price of land, and thus the cost of all other homes. A 1968 report from the National Commission on Urban Problems noted that “the net effect of public land use policy is to reduce the supply of land available for modest cost housing and thus to increase its cost.” As late as 1969, these restrictions were still comparatively minor nationally: in a 1969 survey from the National Association of Home Builders, just 3% of homebuilders mentioned building codes or zoning as their most significant problem. But by 1976, that had risen to 38%, by far the most severe problem listed by builders. Between 1969 and 1975, average land cost per square foot for new housing rose 15% per year.

By the 1970s, when building was allowed at all, homebuilders found themselves subject to an “arduous, long, and expensive process” of approvals, as well as being forced to meet higher (and more expensive) standards for things like sidewalks, and pay for things such as street extensions, for which the government had previously footed the bill.

Opposition was particularly strong for the sort of large, comparatively dense development that Levitt and Sons specialized in. A 1976 survey of 400 developers nationwide found that by far the most common change required by environmental impact reviews was a reduction in project density. The 1979 book The Environmental Protection Hustle chronicles the tribulations of several proposed large housing projects in California in the early 1970s, some of them Levittown-sized. In each case, securing approval required dramatically cutting the number of units in the project.

As a response to a changing market, Levitt and Sons shifted its strategy. By 1960 it had adopted what became the “standard” strategy for large national homebuilders: regional operating offices that were managed semi-independently. Whereas in the early 1950s Levitt concentrated on a small number of large projects, by 1968 it was operating in eight regions in the country simultaneously. By 1973 that had risen to 20 regions. Instead of 17,000 home projects built at a rate of thousands of homes per year, “major” Levitt projects now built just 400 to 600 homes a year. Levitt and Sons also, much to William Levitt’s disappointment, entered the apartment construction business. In 1969 Levitt ruefully stated that “every family is entitled to a house of its own; unfortunately, land costs have forced us into multifamily construction.”

But even as it restricted its operations, Levitt and Sons didn’t give up on the dream of mass-produced housing. One strategy it pursued was to expand abroad: while conditions in the U.S. might no longer allow for Levittown-style construction, Levitt thought that places around the world might. Levitt and Sons began construction on a Levittown in Puerto Rico in 1963, ultimately selling more than 10,000 homes on the island. Levitt also started operations in France and Spain, though these never attempted any large-scale, Levittown-style construction.

Another tactic Levitt and Sons tried was to use modular, factory-built construction. A subsidiary, Levitt Housing Systems, was formed in 1969, and a 140,000 square feet modular home factory was built in Michigan with the capacity to build 2,000 units per year. Optimism was high: one Levitt executive predicted that by 1977, half of Levitt homes would be factory-built. Levitt Housing Systems was one of a small number of companies selected for funding by Operation Breakthrough, a Department of Housing and Urban Development plan to kickstart a factory-built housing industry. Levitt and Sons even explored expanding its factory production operation to Japan. At the same time, Levitt also explored plans to reenter the low end of the market by building mobile homes.⁴ But these plans didn’t succeed: Levit Housing Systems closed in 1972, and the foray into mobile homes was never completed.

By shifting its strategy to more numerous, smaller developments, Levitt and Sons made a comeback from its late-50s low point. Though the company lost money in 1961, by 1968 profits exceeded $4 million. At this point, Levitt and Sons was still the largest homebuilder in the U.S., and had built around 140,000 homes. That year, William Levitt sold Levitt and Sons to the large conglomerate International Telephone and Telegraph (ITT), for $92 million worth of ITT stock. Levitt hoped that joining such a large company would provide easier access to capital and greatly accelerate expansion, and indeed, by 1974 Levitt and Sons had more than $100 million worth of loans guaranteed or provided directly by ITT. Because William Levitt owned two thirds of the stock at the time of the sale, the sale made him one of the wealthiest men in the U.S.

The wheels come off

Following the acquisition, ITT continued to operate Levitt and Sons for the next several years, gradually replacing many of its top executives (including William Levitt himself) with ITT managers. But in 1974, an antitrust suit forced ITT to divest several of its acquisitions, including Levitt and Sons. When trustees were brought in to manage the divestment, they found what they described as “a bleeding elephant”. The U.S. housing market had collapsed in 1973, and Levitt and Sons had lost $7 million in 1973 and more than $50 million in 1974. Not a single one of its regional operations was profitable, and overhead expenses were far higher than was sustainable. It soon became clear that Levitt and Sons had been bought for far more than it was worth, that the company was already in decline at the time of the purchase, and that ITT’s mismanagement had accelerated its demise.

The most reasonable course of action was to shut the entire company down, but the terms of ITT’s settlement required Levitt and Sons to emerge as an operating homebuilder, and the trustees proceeded to carve out a viable company from the wreckage. Most regional operations were shut down, and much of the top-heavy management was pared away. Ultimately everything except Levitt’s operations in Chicago, Florida, and Puerto Rico were shuttered or sold off (with Puerto Rico only kept because ongoing legal liabilities prevented shutdown). The new, smaller Levitt was sold in 1978 to the Starrett Housing Company (notable for building the Empire State Building) for $38 million, just over 20% of what was paid for the company in 1968 in inflation-adjusted terms.

Over the next several decades, Levitt and Sons remained a small, regional homebuilder of no particular importance. Its Chicago and Puerto Rico operations were eventually sold off, leaving it as primarily a Florida homebuilder (though it later had operations in other states). It went through several ownership iterations: Starrett took Levitt public, then sold it to a bank, who then took it public again. In 2008 Levitt and Sons declared bankruptcy, followed by a second bankruptcy declaration in 2018, this time for good. The company never again built anything resembling Levittown, or pursued mass production-style home building methods. Its website remains up, advertising a new Florida housing development that will never be built. 

William Levitt himself went on a different, though no less depressing trajectory. The terms of the sale to ITT initially prevented him from pursuing homebuilding operations in the U.S., but not abroad, and after his departure from ITT he attempted several large-scale international homebuilding projects, all of which failed. In Nigeria, a planned project was abandoned when Levitt realized that it would be “impossible to build”; in Iran, Levitt started construction on a $600 million project, only to be forced to abandon it and flee the country following the Iranian Revolution. In Venezuela, a planned project fell through after the price of oil collapsed. In the 1980s, Levitt returned to the U.S. and attempted several projects in Florida, including a $2 billion, 26,000 home project known as “Villa Poinciana." But these too failed or went nowhere: at Villa Poinciana, Levitt’s partner went bankrupt and Levitt was forced to refund homebuyers who had placed a down payment.

To fund these projects, Levitt had borrowed against his ITT stock; when that stock dropped, he was left unable to pay his debts. In desperation, Levitt siphoned $5 million from a family foundation, but was caught and forced to pay back the foundation by the New York Attorney General in 1981. The fortune he had made from the sale of his company to ITT, and the trappings of wealth (his art-filled mansion, his 240 foot yacht) were all gone, and he died in poverty in Long Island in 1994. Up until his death he was still planning new development projects that would herald his turnaround.

Conclusion

William Levitt tried harder than anyone else to make housing mass producing happen, and for a brief moment it looked like he might succeed. But Levitt’s dreams were predicated on a particular set of housing market conditions — a huge backlog of demand, relatively few competitors, compliant building jurisdictions and little public opposition — that quickly dissipated. In The Merchant Builders, Ned Eichler notes that as early as the mid-1950s, the Levitt model of a single, enormous project built rapidly with mass production-style methods no longer made sense. Says Eichler, “There simply was no market in which an appropriate site could be bought cheaply enough or in which demand was great enough to sustain such a pace.” Many of Levitt’s innovations — slabs instead of basements, power tools, drywall and plywood — did not require large volume production, and were adopted by other, smaller builders (and have since become standard). The enormous increase in land use controls starting in the late 1960s only further inhibited the sort of large-scale developments that Levitt favored.

But even at its early-50s heyday, while Levitt was an efficient builder, he wasn’t unrivaled. Levitt and Sons sold its early Levittown homes for around $10 per square foot, but many other builders (none of whom operated at Levitt’s scale) sold their homes at similar prices. Indeed, Ned Eicher describes the 1,000-square foot, $10,000 home as a “typical” offering for a merchant builder in this era. Levitt believed that economies of scale were best achieved at building more than 1,000 homes per year, and in many developments the company built 3,000 homes a year or more, but most analyses of 1950s homebuilding suggest that there were few, if any, economies of scale beyond around 500 homes per year. The additional benefits from massively streamlining an operation tended to be offset by the huge overheads such an operation required. 

Evidence suggests that this hasn’t changed in the 70 years since the first Levittown. Modern home builders are far larger than Levitt ever was – DR Horton builds more homes in a year than Levitt did in its first 30 years — but they haven’t gotten any further with mass production-style construction methods. The 85,000 homes DR Horton built in 2023 were spread amongst more than 100 individual regions, and even large planned developments only seem to build a few hundred homes at a time.

Levitt tried harder than anyone else to bring mass production methods to homebuilding, but it ultimately still wasn’t enough. And opposition to development and stricter land use controls means that we’ve only gotten farther from housing mass production since then.

1. Levitt and Sons was at least the largest in the U.S. in 1950, and was in 1968 when it was acquired by ITT, and probably for some years after that.

2. The first Levittown demonstration homes were sold for $6,990.

3. Not including the Puerto Rico Levittown

4. Among other expansions, Levitt tried entering the furniture business.