These pre-fab homes were one of the federal government’s dumbest postwar mistakes
We taxpayers invested in Lustron homes, and took a bath
Every single piece of a Lustron prefabricated home was shipped via delivery truck and assembled by a crew within 360 hours. There were no surprises. With only eight models to choose from, builders simply followed the manual.
Prefab homes weren’t a new concept — Sears had been selling mail order homes from its catalog since 1906. But after World War II, as demand for building materials skyrocketed, Lustron promised a quick and virtually maintenance-free home: Instead of wood and plaster, theirs would be built from steel. Thanks to a porcelain finish, the walls would never need a single coat of paint. And at roughly $9,000 ($93,000 in today’s dollars), they were significantly cheaper than the competition.
During the postwar years, any product that promised to maximize leisure pricked the ear of the purchasing public. Lustron homes pledged to “defy weather, wear, and time.” It advertised that “Mother…has far more hours,” there was “far more leisure for Dad,” and the “youngsters…have fewer worries.”
Thousands of people across 36 states bought in, but Lustron was far better at marketing than managing a nationwide distribution strategy or handling mortgage appraisal issues. And its biggest investor, the federal government, was ultimately pressured to concede defeat.
After World War II, the nation was keyed up to settle down — and fast. Amid a rapidly recovering economy, that meant more middle class spending in key economic cornerstones, such as transportation, technology, and housing. The U.S. had already industrialized the production of a vast array of products and services, but still outstanding was a streamlined mechanism for pumping out vast quantities of homes. By the 1940s, it was desperate for a revolution in prefabricated housing, a solution it hoped would simultaneously boost the economy and cure the housing shortage.
Headed by inventor Carl Strandlund, Lustron received its first federal loan in 1947 from the government-run Reconstruction Finance Corporation (RFC), on the condition that Strandlund would build prefabricated homes instead of gas stations. The money helped Lustron install $12.5 million worth of equipment at its factory in Columbus, Ohio. “If Lustron doesn’t work, let us forever quit talking about the mass produced house,” cautioned Vermont Senator Ralph Flanders.
But machinery was one thing; materials were another matter entirely. Steel was in such demand that Congress came under fire in July of 1948 after it proposed setting aside 59,000 tons for Lustron. One Washington hearing held by the Commerce Department’s Office of Industry Cooperation hosted a debate between interested parties. One C.J. Rodman, president of Alliance Ware, Inc. in Ohio, levied the charge that a government steel allocation to Lustron constituted “an effort to protect a government investment.”
In September, Lustron sprayed its first steel panels with porcelain enamel. With a multi-million-dollar government loan and a valuable steel supply, it began production. The goal was 45,000 houses in its first year. After it opened its first model home in Saint Joseph, Michigan, the local paper called Lustron’s experiment “one of the most revolutionary ideas to come out of the post-war building era.”
Soon, trailers were delivering new homes around the country. After workers poured a concrete foundation, Lustron delivered every necessary beam and bolt — 4,000 parts in all — to every planned location. “All you need is a range, refrigerator, and furnishings,” proclaimed one Lustron advertisement. Every model featured steel siding brushed with gleaming “pastel colors” of porcelain, in Surf Blue, Dove Grey, Maize Yellow, or Desert Tan. Some of the earlier Lustron homes in Surf Blue also came with yellow trim. Fancier models — like the “Westchester Deluxe” — offered steel venetian blinds in ivory. It was one of only a handful of modest upgrades, including a built-in china cabinet, a bathroom vanity, a bay window, and ceiling-radiant heat. One distinguishing design feature on Lustron homes was a space-age, zig-zag metal trellis in the front corners of the house.
Mostly, the Lustron offerings were praised for their durability and practicality, with steel framing, metal cabinets and ceiling tiles, interior pocket doors for space-saving, an open floor plan, and enamel-coated interiors in a standard light grey color. Anticipating potential criticism around a lack of customization (or even the option to paint interior walls), Lustron published an upbeat style guide on how to “decorate the home in a Contemporary Manner” and offered a picture-hanging kit among its few add-ons.
At its peak, the Lustron plant was using more electricity than all of Columbus, Ohio. At the time, it was the largest and most completely industrialized housing company in the U.S., according to Suburban Steel: The Magnificent Failure of the Lustron Corporation (2004).
However, materials and shipment costs soon overwhelmed Lustron. By the summer of 1949, it increased the prices of its homes to $10,000 and wanted $3 million more from the federal government. “The importance of this venture is, if it works, you will get cheap housing,” argued RFC Director Harvey Gunderson before a Senate Banking and Currency subcommittee, in June. It just needed a little “to tide them over the next few months.” The project was considered a bellwether for implementing inexpensive factory homes throughout the country, a revolution that would help solve the country’s housing shortage. Lustron got the additional loan.
But instead of building a promised 100 houses per day, the company was managing only 27 daily houses by August of 1949 — after $34 million in federal loans. The company’s monthly losses hovered around $500,000. If Lustron didn’t immediately increase production to 35 or 40 houses per day, it had no chance of breaking even.
Alas, the company continued to bleed money. In January of 1950, it introduced an economy model in an attempt to sell more units. At $7,800, the Newport was 300 square feet smaller than the deluxe home and stripped of “luxury” add-ons. It didn’t work. The following month, the RFC filed to foreclose on Lustron, after which the company declared bankruptcy and failed to repay its government loan. Lustron’s collapse represented a highly publicized, climactic failure after years of federal government attempts at correcting the nation’s housing shortage, via private sector deals.
The housing company had built 2,500 houses, but failed to deliver 8,000 additional orders. Roughly 2,000 steel Lustrons still stand today, most clustered in the Midwest. Many owners have torn out the signature zig-zag metal trellis. Few had accounted for rust.
