Sunday, October 21, 2007

Levitt To Fail?

Stunning news today from the housing industry. (Yes, we are eclectic – we know very little about very many things). Levitt and Sons has ceased all construction and is on the verge of bankruptcy. From the South Florida Sun-Sentinal:

Levitt and Sons, the cash-strapped Fort Lauderdale company trying to survive the housing slump, said Thursday it has temporarily stopped building houses as it tries to restructure its debt.
 The builder's parent, Levitt Corp., said last Friday the subsidiary faces an uncertain future if it can't work out a deal with lenders. Builders in Florida and across the nation are struggling as the once-vibrant housing market keeps deteriorating. Last month, Levitt Corp. said it was laying off as many as 200 of its 573 employees because of the housing downturn. Most of the cuts were planned at Levitt and Sons.

 The builder did not pay $2.6 million of interest payments due last week to its five primary lenders. Levitt Corp. said it has loaned $84 million to Levitt and Sons through Sept. 30 but is unwilling to loan more money unless the builder can negotiate better financial terms with the lenders. 

Levitt Corp. said it doesn't expect to recover the money it loaned to the builder. The builder began to lose momentum starting in the 1970s, said Wayne Archer, director of the Bergstrom Center for Real Estate Studies at the University of Florida.

" In the last two or three years, they've been trying to come back to being one of the major players [in the industry]," Archer said. "But it's not a good time to be a big builder."

I grew up in a Levitt development, in Bowie, MD, and spent much of my youth lamenting it. As I wrote in the late Washington Star in 1978 (whoah – another story there):

“These houses were not built by house builders any more than the assembly-line worker who puts on hubcaps is a car builder. The danger is apparent. As John Steinbeck said, “When our food and housing and clothing are all born in a complication of mass production, mass method is bound to get into our thinking and to eliminate all other thinking.”

Very prescient, John. The danger was, indeed, apparent, but they didn’t listen. Now Levitt is gasping on the tarmac. But the late David Halberstam had a more sympathetic take on the company in his book “The Fifties”:

William Levitt was indeed applying the principles of mass production that had worked so well in the auto industry to housing. There was a desperate pent-up demand for housing in the wake of the war: “In 1944 there had been only 114,000 new single houses started; by 1946 that figure had jumped to 937,000: to 1,118,000 in 1948; and 1.7 million in 1950.” Levitt, virulently anti-union, got rid of skilled craftsmen, replacing them with relatively well-paid workers responsible for doing one very limited job again and again. The most complex part of building a house was putting in the basement, so he dispensed with basements, replacing them with concrete slabs. The slabs required a flat surface, so the terrain was flattened first by bulldozers. Union carpenters carrying their lunches in bulky lunch boxes was deemed an inefficiency, so workers were fed a pre-prepared “Levittmash”© from long troughs. The construction trucks would come in and drop off the building materials at intervals of exactly 60 feet. Twenty-eight separate teams of perfectly choreographed workers would then assemble the house, on an assembly line in which the workers, not the product, moved.

“There were floor men and side men and tile men and men who did the white painting and men who did the red painting. By July 1948 they were building 180 houses a week or, in effect, thirty-six houses a day.” This in an industry in which, prior to the war, companies who built five a year were considered quite productive. To ensure there would be no disruption, Levitt made their own nails, cement and lumber. One pool was built for every 1,000 houses. Schools and churches were inserted at similarly regular intervals. And Levitt workers, non-union status notwithstanding, were well-paid. As Alfred Levitt said: “The same man does the same thing every day. It is boring; it is bad; but the reward of the green stuff seems to alleviate the boredom of the work.”

(By the way, there is one teenie-bitsy fabrication in the above. Just checking to see if you were paying attention. The rest is all accurate paraphrasing and quotation. – ed.)

I have an early memory of watching out my window as a huge, tractor-like device thundered through the fenceless back yards. The lawns had no grass, but had been seeded, and this monster was shooting hay out of a funnel onto the lawns, presumably to keep the seed from blowing away. Apparently, in the original Levittown, if people didn’t mow their lawn, the company would come and mow it for them, then send them the bill. One of the paradoxes in reading about this quintessentially capitalist enterprise is how often you encounter these quasi-socialistic, nanny-state characteristics. This firm but fair paternalism defined the company’s way of relating to its customers. (But not always fair. The company had an abysmal record on discrimination against blacks. My hometown was the site of rather prominent civil rights protests in 1963, which would have been just before we arrived. Levitt was defying the Kennedy administration’s new civil rights housing law).

I hadn’t known they were still around. I’d just read an article in the Times about the sixtieth anniversary of the first Levitt development. The company, and its development, personified a callow anti-historical kind of contemporariness that I just loathed. Nothing about the place grew or evolved organically from its surroundings. It was a place without plangency. The bones of nobody’s ancestors were buried there. But their passing, after sixty years, would be sad; would be an important bit of meaning and post-war history lost to the wind.

Hat Tip: Peter Bacon Hales; University of Illinois at Chicago.