CALL US TODAY: 775 415 - KIRK (5475)

Register for Our Next Live Webinar:

"The Momentum-Maker Mastermind: Mindset, Methods, & Metrics"

Join Kirk on April 12th @9:45 AM (Pacific Time)

GET FUNDED FAST FOR HOME AND BUSINESS!

Kirk Jaffe Enterprises, Inc. has funded thousands of companies just like yours. Contact Us today to Get Started!

Our Services

Kirk Jaffe Enterprises, Inc. has multiple services for home buyers and business owners.

Make us your preferred solution for home and commercial real estate.

MORTGAGE LENDING

We offer the most competitive rates and excellent service beyond closing. Guaranteed! PRO.

REAL ESTATE AND PROFESSIONAL CONSULTING

We offer guidance to real estate professionals, tax professionals, lawyers, and CPA's.

BUSINESS CONSULTING

Are you ready to grow your business to
the next level and beyond. Kirk has helped hundreds of businesses and
can help you get there faster.

INVESTMENT ASSISTANCE

Our proven track record in solid investments has help hundreds and could help you too. Ask us how!

FIND OUT WHY KIRK JAFFE IS THE BEST CHOICE FOR LOANS AND HELPING BUSINESSES GROW!

Kirk Jaffe, CEO/Founder – Executive Management of $200MM private investment fund including Mortgage Notes, Real Estate Owned (REO) and Commercial Property Holdings. He has overseen and held executive authority of over 20,000 real estate transactions in his 20-year real estate career including buying and selling of property, foreclosure, short sale, loan modification, rehabilitation of property with an aggregate over $1 Billion value. Kirk has also originated over $ 1 Billion of new Mortgages.

Kirk is the past President of the Universal City/North Hollywood Chamber of Commerce as well as a former co-chair of the ALFN Commercial Practices Committee. He is active as a speaker and moderator of several trade organizations including the CA Mortgage Bankers Association (CMBA), Mortgage Banking Association (MBA), and the Attorney Legal Financial Network (ALFN). Mr. Jaffe is quoted or has been a guest of several media outlets including: KABC790 Talk Radio, NBC and the Los Angeles Daily News to name a few.

Kirk Has Appeared On:

How Can We Help

You Today?

Start Quote

Change Plan

Contact

Let Us Know What You Need!

We custom fit every service to your personal business needs. Whatever it is, we have a solution. Just click the button below to get assistance today!

If you're looking for a firm who can help you with not just your mortgage, but help you GROW YOUR BUSINESS FAST... you're where you should be!

  • MORTGAGE LENDING
    We offer Custom Tailored mortgages for Home or Business!

  • BUSINESS CONSULTING

    Grow your business FAST with our Business Consulting Services!

  • INVESTMENT CONSULTING - REAL ESTATE ASSETS
    Our win/win approach to investing has helped hundreds. FIND OUT MORE!

  • REAL ESTATE PROFESSIONALS
    If you are a real estate professional and are ready to work with a partner with years of experience, you're in the right place.

  • CPAS, ATTORNEYS, AND INSURANCE PROFESSIONALS
    If you have questions about the potential legal implications of real estate transactions for your clients, Kirk Jaffe has the answers!

1 / 5
2 / 5
3 / 5
4 / 5
5 / 5

WHAT OUR CLIENTS HAVE TO SAY

“What a GREAT guy Kirk is! I highly recommend him and his services all the time and for my own home loan needs. Why would I say that as a Broker myself? Well as a Buyer and a Broker I cannot have my hand into many aspects of the transaction, so I trust Kirk with my financing needs he has yet to let me down! "

Steve Duncan

"Kirk is my go-to lender. He has worked many “miracle situations” and provides top notch service from start to finish...."

Jeff J. Grice

"I have known Kirk Jaffe for many years. Kirk has a stellar reputation. You can see his reviews by going to www.mycity.com/profile/kirk-jaffe."

Bob Friedenthal

"When I need any information regarding the Real Estate Financing space for a client, my first call is to Kirk Jaffe. He is knowledgeable, professional, and experienced. He stays on top of cases and follows up with clients. He is a true asset to my business."

Bruce Fine

"Kirk works hard and well day and night, a kind person and gets it done fast!"

Melissa Oppenheimer

"Kirk did a fabulous job. He walked me thru the process and it was incredibly easy compared to other mortgages I've done. Thanks to Kirk, my house closed in under 21 days, and he got me a great interest rate."

CHARLIE JEWETT

WHY WORK WITH KIRK JAFFE ENTERPRISES, INC?

Because we offer the best service at affordable rates and will help your company grow faster! Click the button or
CALL US AT (775) 415 - KIRK (5475)

How America’s affordable house of the future failed

How America’s affordable house of the future failed

March 19, 20249 min read

The all-steel Lustron was supposed to be an elixir for many of the housing problems we still face today.

The house looks like it’s from an era that never happened.

Tucked on a side street of a tony Dallas neighborhood filled with McMansions — and around the corner from actual mansions that sell for more than $2m — it stands out at only 982 square feet. The land beneath it is valued at more than double the actual house.

Built in 1949, it’s not the only mid-century home in the neighborhood. But this is no ranch house, cottage, or Craftsman. It’s a Lustron: the failed house of the future.

Its boxy, pale yellow exterior is made from steel panels, each measuring about two feet. Along with thousands of other components — used for steel cabinets, steel ceiling tiles, a steel frame — they were mass-produced and shipped from a factory in Ohio and assembled on-site into a home.

How America’s affordable house of the future failed

A Lustron house in Dallas, built in 1949. (Mark Dent/The Hustle)

Seventy-five years ago, Dallas residents paid 25 cents for tours. Magazine ads described the Lustron as “the house America has been waiting for.” The Harry Truman administration hoped Lustrons would be as ubiquitous as Fords or Chryslers: an affordable housing solution for millions of middle-class Americans.

But only ~2.5k Lustrons were ever built. Out of hundreds of thousands of homes that line Dallas’ sprawling streets, this is the only one. The house meant to change American life ended as a brief, failed social experiment.

Would today’s America, reeling from a yearslong housing affordability crisis, be better off if the experiment had worked? 

The idea to make houses as quickly as cars

Before he manufactured material for houses, Lustron founder Carl Strandlund made material for tanks.

Strandlund was a broad-shouldered Swedish immigrant, a serial inventor who favored brown suits with white shirts and green ties. During World War II, he devised a new technique for treating armor plates while working for the Chicago Vitreous Enamel Products Company. The Strandlund method reportedly dropped production time for treating these plates from 15 hours to seven minutes.

Strandlund’s most famous invention, however, hinged on his ability to bend the ears of Washington, DC, bureaucrats.

In 1946, Chicago Vitreous Enamel sent Strandlund to Washington to convince federal officials to provide the company steel for developing a porcelain-enameled steel material it called Lustron (luster on steel). Chicago Vitreous intended to use it on gas stations for Standard Oil and office buildings for Kraft.

But Wilson Wyatt, a member of Truman’s cabinet charged with stimulating the dormant housing market, told him gas stations and Kraft were not a priority. He asked if Strandlund could use the same material to make houses.

The inventor, who’d never built an apartment, much less a house, quickly pulled a few sketches of homes from his briefcase. Soon after, he set up a prototype in Hinsdale, Illinois, for federal officials to visit and carved out a new division within Chicago Vitreous, the Lustron Corporation.

How America’s affordable house of the future failed

Strandlund believed that the Lustron Corporation could tackle America’s housing shortage by mass-producing steel modular homes — Lustrons — for GIs returning from World War II and their families.

The typical Lustron had ~1k square feet of space, five rooms (including two bedrooms), eight closets, central heating, a dishwasher, sliding pocket doors, and built-in cabinets.

The cost for the structure was an estimated ~$7k ($91k today), including the price for a lot and assembly by a 20-man crew. (The average asking price for a home in 1950 was $11k, the average size ~1k square feet.) A nationwide network of dealers would sell Lustrons in local markets.

At just one plant, the company intended to pump out 100-150 houses per day, or 400k per year, the mass scale enabling lower production costs and cheap selling prices.

“If we can use mass production on an assembly line basis so [successfully] for automobiles and airplanes, why not houses?” Strandlund once said.

More radically, Strandlund believed in a homebuying philosophy of consumption rather than investment. He wanted Americans to treat Lustrons like cars, not appreciating assets. The corporation planned to roll out new models of the Lustron every year, including three-bedroom and four-bedroom homes, so families could trade up as they desired. The older homes would be sold at a discount.

Lustrons would be abundant rather than scarce, “so that eventually,” noted one reporter, “every family in the United States would have a home of some sort.”

On June 30, 1947, the Reconstruction Finance Corporation (RFC) committed a $15.5m loan (~$220m today) to the Lustron Corporation. Later, an unnamed federal official would explain his reasoning for backing the Lustron to the St. Louis Post-Dispatch.

“It probably will cost about 30 cents per person in the United States to find out if we can mass produce this home. Doesn’t that seem reasonable in view of [the] public benefit that will accrue?”

The rise and fall of the Lustron

In 1948, the Lustron was ready for primetime. Strandlund believed the company would sell 17k homes that year.

In Manhattan, New Yorkers gawked at a showcase Lustron planted at 52nd and Sixth, not far from Radio City Music Hall and MoMA. A Lustron model in the St. Louis suburbs attracted 35k visitors in two weeks.

It’s not that Americans had never seen modular and prefabricated homes. They’d dotted America’s housing landscape since the early 20th century. Sears sold some 75k houses from its famed catalog. In the Depression years, private enterprises, universities, and government groups like the Tennessee Valley Authority attempted to build economically efficient prefabricated structures.

But prefabs were often cheap and flimsy, and Americans never much liked them. A poll from 1946 revealed just 16% of Americans wanted to live in a prefab house. Strandlund believed the Lustron was different.

He referred to it as a “factory-built home, not a so-called ‘prefabricated house.’” Its defining characteristic — its steel bones and exterior — meant the houses were sturdier, not to mention fireproof, waterproof, and even vermin-proof.

Cleaning would be minimal, about the same as washing a car. The Lustron maximized space with built-in closets and storage.

The design conveyed the idea that people would “have more time” to live their lives and cultivate “a prosperous future,” says Diane Dias De Fazio, a housing and historic preservation expert who once set out to document every Lustron in Ohio. Potential buyers saw a glossy, porcelain-enameled finish atop durable steel, a potent symbol for how they viewed America after the war.

Unfortunately, the metallic sheen belied a troubled business and regulatory landscape.

The Lustron’s Ohio factory, which was roughly the size of two dozen football fields, ran on custom equipment that took longer than expected to procure and develop. It took six months just to design a trailer to store the house’s components, which numbered ~3k, for delivery.

Many components got lost during the shipping process, causing delays. The company also struggled to train and hire assembly workers in local markets.

Some cities, bogged down by politics, did not update building codes to allow for steel housing, effectively banning Lustrons.

America Affordable house

The complications led the Lustron Corporation to increase the prices of homes, which went for closer to $10k-$11k than the anticipated $7k. And that still wasn’t enough for the company’s bottom line.

The Lustron Corporation needed to produce 35-40 houses a day to break even and keep its housing affordable, giving it no chance to build momentum slowly. The company either needed to be extremely popular and efficient right away — attaining enough production and revenue to cover costs — or receive infusions of cash to stay afloat.

The federal government initially loaned $15.5m, in 1947, followed by another $10m in 1948 and $7m in early 1949 (for a total of ~$400m in today’s dollars). But when the company failed to deliver on its promises (by one count it manufactured just seven homes in the first few months of 1948) or pay back any of the loans, Uncle Sam started to lose his patience.

“I have only seen one of them,” an Arkansas senator remarked at a hearing of the RFC in June 1949, “but it sort of reminds you of a bathtub.”

A representative from Kansas demanded a congressional investigation, asserting he’d heard Lustron had produced $3m in homes nobody wanted to buy. Others criticized the Lustron Corporation for hiring government officials who’d helped them secure loans.

Affordable house

Strandlund maintained that Lustrons were popular — the company said some markets had waiting lists — but needed more time to perfect the production and distribution processes.

In the end, it didn’t matter. For the idea to get off the ground, the Lustron Corporation needed the government’s support, and it lost it. The RFC foreclosed on its loans in 1950. The Lustron Corporation was finished.

Strandlund didn’t recover from the failure. When he died in 1974, his widow, Clara, blamed his death on “a broken heart.”

“It was his dream,” she told The Minneapolis Star Tribune, “that every Joe could have a house.”

The case for modular homes

For a few decades after Lustron ceased production, America didn’t really need them. The country got the postwar housing it desired, with developers building 13m homes from 1948 to 1958 (albeit almost entirely in suburbs blocked off to Black residents; shortages of quality housing persisted in many urban areas).

But the US never developed two qualities fundamental to the Lustron: the idea that houses should be consumed like cars and the ability to mass-produce modular housing.

Americans got hooked on treating houses as investments. In addition to a place to live, Americans expect a sizable return on their home, incentivizing homeowners and lawmakers to favor policies that constrain supply and restrict land use.

According to a report by the Center for American Progress, ~1%-2% of home construction in 2022 was modular. Off-site construction was about 10% in Germany, 15% in Japan, and 45% in many Scandinavian countries.

Affordable house

Michela Zonta, the report’s author and a housing policy analyst, believes modular housing could be an answer to America’s affordability crisis and housing shortage, which stands at ~4m units. Modular construction is faster than on-site construction and brings down labor and material costs, two of the biggest obstacles to ramping up housing supply.

But modular housing still faces many of the same roadblocks the Lustron did: inconsistent zoning policies and building codes across regions, along with funding gaps that make it difficult for modular developers to produce at scale.

More than anything, Americans tend to lump modular housing with manufactured homes and trailer homes.

“Modular homes are really indistinguishable from on-site constructed buildings,” Zonta says. “They can be of very good quality.”

The Lustron, for all its failings, certainly proved its durability. Of the ~2.5k built, ~1.8k are still standing, according to Jean Fetters-Conner, who catalogs Lustrons at Lustron Research.

Many of the original owners stayed in their Lustron for decades, opting for upgrades here and there. Fetters-Conner has heard “stories of [Lustrons] surviving tornadoes that wiped out entire blocks.”

Ironically, Lustrons face more danger from the realities of the modern housing market. When they go on sale, they often attract interest from buyers who’d rather just have the land underneath.

They raze the Lustron to make space for something new — something larger and more expensive.

©TheHustle

Lustron HousesSteel Modular HomesMid-Century Homes
Back to Blog

Connect With US

CONTACT US TODAY

Need to reach us? Send us an email or give us a call today.


Kirk Jaffe Enterprises, Inc.

195 Highway 50, Ste 104-476

Stateline, NV 89449


Copyright 2024 Kirk Jaffe Enterprises All Rights Reserved