William Jaird Levitt
Levitt, William Jaird
Levitt, William Jaird
(b. 11 February 1907 in Brooklyn, New York; d. 28 January 1994 in Manhasset, New York), builder and developer best known for his Levittowns, postwar suburban subdivisions in New York, Pennsylvania, and New Jersey.
Levitt was one of two sons born to Abraham Levitt, a real estate lawyer, and Pauline Biederman. He entered New York University in 1924 but left without graduating in 1927 to join his father’s law firm. Levitt’s 1929 marriage to Rhoda Kirshner, with whom he had two sons, ended in divorce in 1959. In the same year, he married Alice Kenny, who he divorced in 1969, once again marrying before the year was out, this time to Simone Korchin.
When a client defaulted on a land deal in 1929, Levitt’s father formed Levitt and Sons to develop the property. William Levitt managed the firm, while his brother Alfred designed the houses. In the 1930s they built several developments on former estates in Manhasset, Long Island, and deeded the mansions to the residents for use as clubhouses. The Levitts’s nearby “Miracle Mile” shopping center lured suburban branches of Manhattan department stores to the community.
In 1941 the Levitts built 2,350 defense housing units at Norfolk, Virginia. Of these, 1,600 were slab-based worker houses, constructed in assembly-line fashion. It was here that Levitt conceived the idea for his Levittown project. He later served at Pearl Harbor in Hawaii as a lieutenant with the naval construction battalions, the Seabees; meanwhile, at home, the firm took options on 1,000 acres on Long Island’s Hempstead Plains. In 1946, with the war over and a housing shortage underway, Levitt and Sons purchased additional land to complete their holdings and announced plans to build affordable housing for veterans.
The plans met with considerable opposition from local community, political, and labor leaders concerned with the rudimentary nature of the houses and the use of concrete slabs and labor-saving new materials. Levitt launched a public-relations campaign around the themes of patriotism and social justice, and in May 1947 house-hungry veterans filled the local town hall, successfully demanding the necessary changes to the building codes. In July, Levitt broke ground for what would become Levittown, a mass-produced subdivision of four-room Cape Cod houses.
Levitt reduced construction to about twenty-six steps, each of which was the responsibility of a different crew. He called this method his “on-site factory.” Hiring workers as subcontractors, Levitt circumvented the unions, paying workers by the unit rather than the hour and speeding production to a completion rate of thirty houses a day. He favored skilled laborers over craftsmen and used prefabricated elements wherever possible; nonetheless, the Levittown homes, which sold for under $8,000, included appliances such as washers and dryers, refrigerators, and even television sets.
By the time the Federal Housing Administration (FHA) withdrew its support from rental housing in 1948, to encourage home ownership among the working class, Levittown consisted of 4,000 houses. To fund the next phase, Levitt sold most of the houses to his tenants. The remainder were sold, along with his management company, to a nonprofit organization in Pennsylvania (a private school) to treat his income from the development as a capital gain rather than the more highly taxed income from rents.
The 1949–1951 models, built only for sale, had a new exterior with the same concrete slabs, four rooms and bath, and expansion attics that could be turned into additional bedrooms. These ranch-style houses sold faster than Levitt’s crews could build them. In 1952 Levittown comprised 17,447 houses with a community center, nine swimming pools, seven village greens, and land set aside for houses of worship.
Levittown was severely criticized for its mass-produced houses, the conformity of the lifestyle they imposed, and the resulting influx of working-class families into formerly middle-class suburbs. Levitt’s racially covenanted deeds—which conformed to the FHA standards of the times—were also controversial. It was his policy not to sell houses to blacks, which he explained by saying that if a black family bought a house at one of his Levittown developments, this would lead to a decrease in purchases by white families. He told the Saturday Evening Post in 1954, “As a company, our position is simply this: we can solve a housing problem, or we can solve a racial problem. But we cannot combine the two.”
Levitt also built Levittowns in Pennsylvania and New Jersey, where, still stinging from the criticism of the first Levittown, he varied the designs and aimed for a more affluent market. After cancer surgery in 1959, Levitt went on to build in Maryland and Puerto Rico as well as Las Vegas and Chicago. In 1963 he returned to Long Island to build another series of mid-priced developments in Suffolk County.
Levitt’s French branch, Levitt-France, built Chez Levitt outside of Paris in 1964 after the French government eased mortgage regulations. As with the early Manhasset developments, Chez Levitt included a former chateau converted to a community center, a park, tennis courts, and a swimming pool. But the French effort was less successful than its American prototype, in part because European purchasers demanded amenities that added considerably to the sale price.
In 1968 he sold Levitt and Sons to International Telephone and Telegraph (ITT) for $92 million in stock. Levitt and Sons became the Levitt Corporation, with Levitt as a consultant. Under the terms of the agreement, Levitt could not build in the United States for ten years. Doing business as Levitt Industries, Inc., Levitt invested in other fields, including an engine factory in Israel and a chain of drugstores in New England. He also experimented with “panelization,” a form of prefabrication in which house walls were wired, plumbed, and painted in the factory for assembly at the site. His projects were heavily leveraged, using ITT stock as collateral. In 1972 a major downturn in construction caused financial problems for ITT, and Levitt’s ITT stock fell, eventually losing more than 90 percent of its value. In 1974 ITT was ordered to divest some of its holdings, including Levitt Corporation, which languished in receivership until 1978, when it was sold to Starrett Housing Corporation.
After being invited to develop housing in Nigeria in 1977, Levitt withdrew from the project, believing that it would fail, probably because of the instability of Nigeria’s government and its economy. Ironically, he then turned his attention to what would become a far more volatile foreign market. In 1977 he began a project of 11,600 garden apartments outside Tehran, Iran. With the shah’s overthrow in 1979, Levitt was deported and the project halted. He unsuccessfully sued the Iranian government for $34 million in lost revenues.
When his agreement to abstain from building in the United States expired in 1977, Levitt formed International Community Corporation and announced a new Levittown to be built near Orlando, Florida. Starrett immediately sued Levitt for infringing on its rights to the Levittown credentials. As a result, Levitt was forbidden to use any references to Levittown or its history in advertising and publicity. He subsequently changed the development’s name to Williamsburg. The Williamsburg project ran into serious problems when roof tiles, purchased from Australia, began to leak. Complaints to Orange County officials resulted in a 1980 moratorium on building permits, pending repairs to the houses. As the first 1,000 of the planned 9,000 dwellings at Williamsburg reached completion in 1981, Levitt’s already tenuous finances headed toward legal disaster. He was charged with illegally transferring millions of dollars from the family’s tax-exempt foundation (established by his father in 1949) between 1974 and 1980, and with misleading the foundation’s board of directors. The court ordered him to pay $10 million in punitive damages and $4 million in interest. In 1987 Levitt resigned from the foundation.
From 1982 through 1986, Levitt, no longer considered a good banking risk, kept his business alive by moving money from project to project. He used sizable deposits on projected houses to build units for which money had already been paid. In 1984 the Williamsburg developments failed amid accusations that he had transferred business funds to personal needs. Undaunted, Levitt announced a third Florida project on 7,000 acres outside Orlando. Poinciana Park’s 26,000 houses promised to become the world’s largest development.
In 1985 Levitt’s silent partner, Old Court Savings and Loan, failed. The Maryland bank was placed in receivership, curtailing Levitt’s access to financing. The receiver determined that continued association with Levitt’s name and lost credibility would negatively impact the Poinciana Park project’s marketability, but Levitt continued to advertise the development. Fourteen months later, with no construction underway, more than 3,000 deposits had been received. Despite the legal ban on promotion of his association with Levittown, the reputation of his earlier developments had drawn a stream of deposits.
In 1986 Levitt was forced to liquidate all of his assets, including his Mill Neck estate on Long Island’s north shore, to pay his creditors. Many of these were contractors, now on the brink of bankruptcy, who had worked with him since his Levittown years. The Orlando Williamsburg property was sold with only 2,000 of the proposed units built, and the Tampa Williamsburg development was foreclosed with only 124 of its proposed 4,500 houses completed.
In 1987 Levitt was found guilty of using deposit money to fund the advertising and overhead expenses for the projects. Unable to repay $12 million to Old Court Savings and Loan, he lost the Poinciana property. New York’s attorney general sued for the return of the deposits to dissatisfied New Yorkers and barred Levitt from selling houses in the state. Levitt settled the suit in 1987, agreeing to repay the foundation $11 million, of which only $7.7 million had been paid by 1990, when he unsuccessfully requested relief from the court. He also returned $434,000 in deposits. Levitt was accused of having used additional millions from the foundation to pay his Florida debts.
Still planning to rebuild his business, Levitt died of kidney failure at age eighty-six in Manhasset’s North Shore University Hospital, a clinic funded by his foundation during the good years. He is buried in Mount Ararat Cemetery in North Lindenhurst, Long Island. His last known residence was a rented condominium.
William Levitt has been alternately credited with inventing the American suburb and blamed for suburban sprawl. Neither view is entirely accurate: he was a businessman who provided what the market demanded. His skill was in clever adaptation of the ideas of others, innovations suited to the business climate of a time and place. Despite the poor judgment of his later years, for most of his career he managed to earn handsome profits, and in turn his foundation generously funded charitable causes. Throughout his troubled years, Levitt returned to Levittown and the affordable houses he had provided for young families. He strove to recapture his early success with venture after venture. Neither the heroic figure of his early years nor the villain of his later ones, Levitt was an entrepreneur for whom the times and the rules of the game had changed.
Levitt’s clippings files, along with a number of photographs and maps of his developments, are on deposit in the Long Island Studies Institute at Hofstra University. The best sources of information about him can be found in books and dissertations about his early communities. John Liell’s Levittown: A Study in Community Planning and Development (1952) was the first serious study of the Long Island Levittown. Herbert Gans mounted a spirited defense of Levitt and his Levittowns in The Levittowners: Ways of Life and Politics in a New Suburban Community (1967), and Jean Buhr’s The Meaning of Levittown (1988) addressed the social phenomenon of the postwar subdivision. In Expanding the American Dream: Building and Rebuilding Levittown, Barbara Kelly examines the transition of Levittown from working-class to middle-class housing. A profile of Levitt at the height of his success can be found in Current Biography (1956). Numerous articles on Levitt appeared in Newsday over the years, and obituaries are in the New York Times, New York Post, and Newsday (all 30 Jan. 1994).
Barbara M. Kelly
William Levitt (1907-1994) gained national attention as the man who mass produced houses at a rate of one every 16 minutes. He was introduced to Americans on the July 3, 1950 cover of Time magazine as the "cocky rambunctious hustler" prone to exaggeration. Levitt touted his community as a new form of ideal American life.
William Levitt's father, Abraham Levitt, was the son of a poor rabbi who immigrated from Eastern Europe. Abraham Levitt left school at age 10, but educated himself. At the age of 20 he entered law school, specializing in real estate law. He married Pauline Biederman in 1906. Their first son, William Jaird was born on February 11, 1907 in Brooklyn, New York. Five years later the couple had another son, Alfred Stuart. As a child, William Levitt would put on a suit, run into the living room and announce his plans to go to Manhattan to make money and live well. Levitt attended Public School 44 and Boys High School in Bedford-Stuyvesant. He played lacrosse and was on the swim team. Levitt majored in mathematics and English at New York University, but left in his junior year.
Abraham Levitt represented real estate clients and occasionally bought and sold properties. He used money that his wife made from sewing to buy vacant lots in Brooklyn. Around 1925, he received 100 plots in Rockville Centre from a bankrupt client and financed builders who bought the land and started to construct houses there. When the builders went out of business, he had to take control of the partially finished houses. Abraham encouraged his sons to finish the homes, with existing crews.
In 1929, Abraham founded Levitt and Sons, Inc. William Levitt became company president at the age of 22, handling the advertising, sales, and financing. Alfred Levitt, still a teenager, became vice president of design and drafted plans for the first Levitt house, a six bedroom, two bathroom Tudor style home that sold for over $14,000 in 1929. The Levitts sold 600 of these upper middle class homes, part of the Strathmore project, in four years, even though it was during the Great Depression.
In November 1929, William Levitt married Rhoda Kirshner. The couple had a son, William Jr., in 1933. Levitt earned a reputation as the person to see for high-end, custom homes on Long Island, New York's North Shore, called the Gold Coast. The company built 200 homes in the North Strathmore development in Manhasset, which sold for $9,100 to $18,500. The Levitts built another 1,200 homes in Manhasset, Great Neck, and Westchester County. Radio stars, prominent journalists, surgeons, business people, and lawyers bought the upscale Levitt houses. Selling these homes made the Levitt family rich.
William Levitt, the grandson of a rabbi, did not sell these upscale homes to Jews. "Sure, he went along with the local practice of real-estate agents not selling to Jews. History should show that Levitt was part of the ugly gentlemen's agreement," noted Paul Townsend, Levitt's former public relations man. "Gentlemen's agreement" refers to the unspoken agreement among gentiles to discriminate against Jews. Levitt saw the policy as the unfortunate cost of doing business. Although Levitt opposed what he referred to as "institutionalized religion," those who knew him say he was not anti-Semitic. Levitt made large contributions to Israel. In 1947, he handed a $1 million check to Teddy Kollek (the future mayor of Jerusalem) as a loan for weapons. During his life, Levitt donated millions of dollars to Jewish charities.
Mass Production of Houses
In 1941, the Levitts won a government contract to provide 2,350 housing units for defense workers in Norfolk, Virginia. While building these units, the brothers learned valuable lessons about the mass producing of houses. In 1944, William Levitt, then 36 years old and father of a 10-year-old son and a baby, James, was sent to Oahu, Hawaii as a lieutenant in the Navy Seabees. He was the personnel manager for 260 men in the Navy construction unit, but spent most of World War II gambling, drinking, and playing jazz piano. He also thought about what he would do after the war, knowing that his father and brother were making plans for him. Levitt felt that anyone who built a lot of low-cost housing after the war was going to be very wealthy. Wartime shortages had crippled the housing industry, but veterans were eager to buy homes and take advantage of government loans after the war.
While William Levitt was in Hawaii, his father took over as company president and planned to build a community of 6,000 low-priced homes in Nassau County, much larger than any other U.S. development. The company bought 1,000 acres of potato farms on Long Island. On July 1, 1947, Levitt broke ground on the $50 million development, Levittown, which ultimately included 17,000 homes on 7.3 square miles of land. Alfred Levitt created the mass production techniques and designed the homes and the layout of the development, with its curving streets. Abraham directed the landscaping, whose focus was two trees to each front yard, all planted exactly the same distance apart. William was the financier and promoter, who persuaded lawmakers to rewrite the laws that made Levittown possible. The houses, which were in the Cape Cod and ranch house styles, sat on a seventh-of-an-acre lot. They had 750 square feet with two bedrooms, a living room and a kitchen, an unfinished second floor and no garage.
To mass produce the houses, the company broke the construction process down into 27 operations. Specialized teams repeated each operation at each building site. Twenty acres formed an assembly point, where cement was mixed and lumber cut. Trucks delivered parts and material to homesites placed 60 feet apart. Then carpenters, tilers, painters and roofers arrived in sequence. One team used white paint, another red. One worker's only duty was to bolt washing machines to floors. The Levitts built up to 180 houses a week when most builders were constructing four or five homes a year.
Levitt revolutionized the home construction industry by sifting through outdated building codes and union rules and using new technologies to get quality building jobs completed quickly and cheaply. To save money on lumber, the Levitts bought forests and built a sawmill in Oregon. They purchased appliances directly from the manufacturer, cutting out the middleman. They even made their own nails.
The mass production methods kept costs so low that in the first years the houses sold for $7,990, a price that still allowed a profit of about $1,000. (In the late 1990s they sold for about $155,000.) When the Levitt homes went on the market in March 1949, eager buyers lined up to purchase them. On the first day, Levitt sold 1,400 homes. They could be bought for a $58 downpayment, and included a free washing machine and television. The success of Levittown depended on huge government assistance. The Federal Housing Administration guaranteed the loans that banks made to builders. The Veterans Administration provided buyers with low-interest mortgages to purchase those houses, thus the risk to the lenders was small.
Levittown later became racially mixed, but for years Levitt's sales contracts forbade resale to African Americans. He once offered to build a separate development for blacks but refused to integrate his white Levitt developments. "We can solve a housing problem, or we can try to solve a racial problem," Levitt said. "But we can't combine the two." In 1963, his all-white policies led to civil rights protests at another Levitt development, in Bowie, Maryland.
Sold Business to ITT
Levitt and Sons built 15 other projects throughout Long Island. In 1952, they brought their mass production operation to Bucks County, Pennsylvania. After that development was completed in 1958, Levitt went to Delaware and constructed a 12,000-home Willingboro, New Jersey project.
Relations among the Levitt family fell apart in 1951 after Alfred divorced his wife, to marry a 19-year-old fashion model he met on a trip to Paris. The brothers split their business affairs in 1954. Alfred developed Queens apartment complexes and Suffolk housing developments. He died in 1966, at the age of 54.
William Levitt took his company public in 1960, but lost $1.4 million a year later as housing demand fell and huge tracts of land near metropolitan areas grew scarce. He quickly changed tactics, branching out to Chicago, Washington, D.C., and even France and Puerto Rico. Levitt reduced the scale of projects, dabbled in townhouses, and delegated authority and decentralized management. He posted a 20 percent average annual increase in sales into the late 1960s.
After he had built over 140,000 houses around the world, Levitt sold the company to the International Telephone & Telegraph Corp. for $92 million in July 1967. At the age of 60, he became incredibly wealthy, getting $62 million in the form of ITT stock. ITT changed the name of its new subsidiary to Levitt Corp. and Levitt agreed not to build in the United States for ten years. He entered the agreement thinking he would play a role in ITT affairs, but executives felt Levitt was too old to take on more responsibility.
While he was married, Levitt had an ongoing love affair with his secretary, Alice Kenny. He married her in 1959, divorcing his wife after 29 years of marriage. In 1969, Levitt divorced his second wife and married Simone Korchin, an art dealer from France.
Levitt bought a 237-foot yacht, a 30-room mansion in Mill Neck, New York, $3 million in jewelry, paintings by Renoir, Monet, Degas, and Chagall, and a Rolls Royce. To avoid paying taxes, he had not converted his ITT stock to cash. Instead, he borrowed against it to build subdivisions in places like Iran, Venezuela, and Nigeria. When the ITT shares crashed, Levitt's holdings lost about 90 percent of their original value. Chase Manhattan Bank seized Levitt's stock as collateral. When the foreign projects floundered, he was millions of dollars in debt.
Regulators forbade Levitt from doing business in New York. They said he took homeowners' deposits for Florida homes and money that should have been used for repairs and maintenance. Investigators claimed that Levitt also looted at least $17 million from his family's charities to cover personal expenses. He was forced to sell his mansion.
Levitt died in Manhasset, New York on January 28, 1994, on the verge of bankruptcy and unable to pay his bills. In an interview shortly before his death, Levitt said he would like to be remembered as "a guy that, I suppose, gave value for low-cost housing. Not somebody that gave value for half-million-dollar houses. Anybody can do that." Levitt saw himself as more than a real estate developer. He sold people the American Dream, in its cold war guise. "No man who owns his own house and lot can be a communist," Levitt once said. "He has too much to do."
Duncan, Susan Kirsch, Levittown: The Way We Were, Maple Hill Press, 1999.
Ferrer, Margaret Lundregan and Tova Navarra, Levittown: The First 50 Years, Arcadia Publishing, 1997.
"Levittown: Documents of an Ideal American Suburb," Cultural History Projects,http://www.uic.edu/~pbhales/Levittown/index.html (March 16, 1999).
"Suburban Legend, William Levitt: His answer to a postwar housing crisis created a new kind of home life and culture: suburbia," Time.com, http://cgi.pathfinder.com/time/time100/builder/profile/levitt.html (March 16, 1999).
"The Dream Builder," LI History.Com, http://www.lihistory.com/specsec/hslevpro.htm (March 16, 1999). □
Levitt, William Jaird
LEVITT, WILLIAM JAIRD
William Jaird Levitt (1907–1994) revolutionized the U.S. housing industry. Most construction companies in the United States eventually adopted methods invented by Levitt and his sons to lower the cost of making houses for a mass market of consumers. Levitt's innovations made housing more affordable to everyone. Millions of middle and working class people in the United States became homeowners during the mid-twentieth century due to Levitt's efforts.
William Levitt was born on February 11, 1907, in Brooklyn, New York, the son of a lawyer and building contractor. He attended Brooklyn's public schools and then enrolled at New York University for three years before dropping out.
At the age of 22 Levitt dreamed of becoming a commercial airline pilot. He instead joined his father Abraham and his brother Alfred to create Levitt and Sons, a construction company specializing in single-family home building. The company was founded in 1929. When Levitt became the company's president he occupied himself primarily with management and financial matters. Levitt and Sons did modestly well despite the Great Depression (1929–1939) of the 1930s. Levitt joined the Navy during World War II (1939–1945), serving as a lieutenant with the Seabees, the Navy's "can do" construction team. In the Seabees Levitt gained valuable experience in rapid, safe construction under unsafe conditions.
While he was in the Navy, the family business in the United States made much progress. In 1942 it received a federal war contract to build 1,600 homes for military and civilian personnel near a naval base in Norfolk, Virginia. In the construction of the last 750 homes built there, Levitt's father and brother experimented with building processes, especially with standardization and cost reduction.
After Levitt returned to the family business the company entered its greatest era of success. The Levitt family correctly forecasted the tremendous economic boom that happened in housing construction immediately after World War II. They analyzed the factors that caused single-family houses to be expensive. One major factor was that single homes were largely custom-made and required time consuming custom installations.
The Levitts decided to apply assembly line techniques to their housing construction. They developed one basic floor plan for a two-bedroom, 800-square-foot house, and made as many pre-fabricated parts as possible. They then hired specialized workers who did only one basic job, going from house to house, ahead of one crew, behind another crew, in assembly-line style. With these innovations the Levitts began to make 36 houses a day.
The crews worked so fast that the Levitts created instant suburbs. The houses sold as fast as they could be built. There were plenty of potential home buyers, most of them war veterans who had inexpensive mortgage loans guaranteed them under the G.I. Bill, a provision of the U.S. government to help returning war veterans readjust more quickly to civilian life back home. This included a home mortgage plan.
The first community built completely by the Levitts was called "Levittown." It was located on Long Island, New York; construction began in 1947 and completed in 1951. It included 17,500 Cape Cod-style homes spread over 7.3 square miles of land. What had once been potato fields was turned into homes with small parcels of land for buyers. The features of the homes included up-to-date kitchen equipment, laundry rooms, and television sets. Each house had two bedrooms and an extension attic that could serve as a third bedroom or an office. As the houses were built they were immediately put on the rental market for $65 a month with an option-to-buy clause for just under $7000 and no down payment for veterans.
By 1949 business was going so well that the new houses were no longer rented. They sold immediately, now for $8000. The Levitts also built larger homes for just under $10,000, with four to five bedrooms. By building the houses on winding streets and using different color schemes on their facades, the Levitts created houses that all looked "different," at least from the curbside view.
Levitt and Sons earned a profit of $5 million from the building of "Levittown." The mass production techniques used by the company were clearly the key to its success and future. Later Levittown developments were built in Pennsylvania, New Jersey, New York, and Florida, with the same success.
Levitt understoond his marketing success. The majority of the company's sales were to World War II veterans. Levitt sold to young families who sought inexpensive "starter homes." A Levitt home was a family home, and the postwar United States placed great stress on the family unit and of the quality of family life. The Levitt suburban homes also gave families more privacy than was available in city apartments. Living in the suburbs made it possible for young families to have green lawns, small patios, swing sets in a yard, and barbecue grills.
William Levitt and his family company remained successful from the late 1940s to the late 1960s. Levitt's homes, however, were eventually criticized for their conformity and "ticky-tacky" quality. Levitt was also accused of refusing to sell his Levittown homes to African Americans in the 1950s.
William Levitt died in 1994. During his lifetime he created homes for millions of people in the United States. He provided them with a higher standard of living and a better quality of life than previous generations had enjoyed.
See also: GI Bill, Suburbs (Rise of)
Conrad, Pam. Our House: The Stories of Levittown. New York: Scholastic, 1995.
Fishman, Robert. Bourgeois Utopia: The Rise and Fall of Suburbia. New York: Basic Books, 1987.
Gans, Herbert J. The Levittowners: Ways of Life and Politics in a New Suburban Community. New York: Pantheon Books, 1967.