The 1950s May Have Some Lessons for The 2010s

In reading David Halberstam's book, The Fifties, which recounts highlights and lowlights of the growth and development and politics of U.S. in the decade-and-a-half that followed WWII, there are a interesting topics that deserve revisiting in light of today's economic and world events.

 

Recapping: The Cold War began in that time period. Older baby boomers may remember scares over nuclear war in the confrontation with Russia during the Cuban Missile Crisis.  People built fallout shelters after  seeing test bombs exploding on the news. Sputnik arrived. Elvis emerged. Eisenhower was elected, twice, the first Republican since Hoover.  

Those who are old enough to have lived though the 1950s had to be thinking deja vu all over again when Putin started eyeing Ukraine.  While the names have changed, we are still battling some of the same protagonists in the world, and that we still face some of the same issues at home. 

In our economy, post WWII was a time of scarcity on the one hand and a time of ramping up production to meet demand for goods and services on the other.  Even into the early 1950s there was still a housing shortage due to the return of WWII veterans and their families.   Veterans went to school on the GI Bill, they scrambled for jobs, and they could not find affordable housing.   

For different reasons, many people today people are in the same situation.  Scrambling for jobs and finding housing out of reach or unavailable. 

One innovator in that time period was Navy veteran Bill Levitt, who, according to Halberstam, applied Henry Ford's mass production concept to create a new low-cost homebuilding method.  The large-scale community was originally called Island Trees, in Hempstead, N.Y., but it came to be known as Levittown.  The first day the office was opened for presale of homes, they wrote 1400 contracts.  At build out, it had 17,000 homes with 82,000 people.  Levitt financed the homes. The Levitt family built a similar community in Bucks County Pennsylvania.  Monthly payments are reported to have been as low as $57/ month, at least when they started building.  

A similar expansion of U.S. cities happened all over the country, with other builders copying Levitt's techniques, and the result was that 60 million people moved to the newly created suburbs. Also the country learned how to produce affordable housing for families on the way up. 

While we are not in an identical situation to post WWII,  the example of the Levitts does beg a question:  in a time of increasing prosperity, is there a Bill Levitt who can do for today's new homebuyers what he did for New Yorkers in the early 1950s? Can new communities with lower-priced, affordable housing be created and be profitable for a developer/ builder?  Can anyone build modest-sized homes fast enough to allow them to be sold for the inflation adjusted value of $57/ month?  

Most people would say it's impossible.  That's exactly what they said to Levitt, but he built 140,000 homes starting in the 1950s. 

Today, that $57 would equate to $511, which is less than what most renters pay. And Levitt threw in a washer and a television set, a big deal in the 1950s, at that price.  If done today, just as then, the lots would be small, and the homes would be small.  But starter families do not need palaces.  They need a roof over their heads and a way to start investing in their futures.  They need a starting point so that they can move up to the bigger homes today's builders prefer to build.   

 

-- Kathy Bissell