Penn Wealth Publishing

2022.01.16 Penn Wealth Report Vol 10 Issue 01

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6 penn wealth Report volume 10 issue 01 16 Jan 2022 Copyright 2022. All Rights Reserved. strategic vision 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 dense- ly-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. e Great Depression exacerbated the situation, creating even more of a vac- uum 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 mid- dle 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 fore- closure. Instead of selling the land, Abraham started Levitt & Sons and began building on the property. e 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 pay- ments. 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 com- pany, 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 fore- closure 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 top- line appliances built into the homes. When the war hit and bans on new home construc- tion were implemented, Levitt & Sons once again showed their business acumen by becoming a govern- ment 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. How One Homebuilder Helped to Create the Modern American Suburb The Condemned Tenement, NYC, 1906, by Charles Henry White; Public Domain

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