William Levitt Facts
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."
Further Reading on William Levitt
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). □