Levittown, New York: America’s First Suburb (Part 2 of 3)
NOTE: This is Part 2 of a 3 part article. For Part 1, click here: Levittown NY, America’s First Suburb – Part 1
William (left), Abraham (center) Alfred (right) Levitt
Ownership Of Levitt Homes — Beginning To End
From its beginning, to its untimely end, Levitt Homes had several owners. A summary of ownership, beginning to end, is just below. Following the summary are full details of all ownerships of the company.
The Rise & Fall Of Levitt Homes Occurred Several Times, Starting With Its Initial Rise During The Levittown’s Era, 1947–1964.
- In 1954, the Levitt brothers went their separate ways and William Levitt became sole owner of the company.
- In 1960, William took the company public. After a brief downturn in 1961, Levitt rose to have record sales $93.6 million, with $4 million in profit, in 1967.
- In 1968, ITT (International Telephone & Telegraph) purchased Levitt Homes for a total of $92 million in ITT stock. William Levitt (the majority stockholder) received $62 million (of the total $92 million) in ITT stock. Levitt Homes began a rapid decline after ITT became its owner. Some blamed ITT for selling off Levitt’s land-holdings, while others saw problems resulting from ITT mismanagement, and declining reputation of ITT. Under control of ITT, Levitt & Sons lost $400 million during 1968-1975.
- In 1975. Palmieri & Co. took control of Levitt Homes, under an Anti-Trust Settlement court order to dispose of it.
- In 1978 Starrett acquired Levitt Corp. (from ITT) for $30 million. In 1976 the company–now Levitt Corp.–had net income of $2.2 million on sales of $56.5 million. In 1977, Levitt Corp’s earnings rose to $4.4 million, on sales of $88 million. By 1987, Levitt’s sales passed the $100 million mark. In 1988 Levitt was the largest home builder in Puerto Rico, with nearly all of the company’s coming from its Puerto Rico operations.
- In 1999, Levitt Corporation was purchased (from Starrett) by BankAtlantic Corporation. The name of the company was retained and the corporation became a subsidiary of BankAtlantic.
- On Dec. 31, 2003 BankAtlantic Bancorp, Inc. spun off Levitt Corp. as a public corporation.
- On Jan. 1, 2004, Levitt Corp. began trading on the New York Stock Exchange (NYSE).
- Levitt and Sons, LLC was established as the Home Building Operations subsidiary of of Levitt Corporation.
- In Nov. 2007, Levitt and Sons, LLC (Home Building Operations) filed for Chapter 11 Bankruptcy protection. A press-release from Levitt and Sons LLC stated: “Excess supply, particularly in previously strong markets like Florida, has led to downward pricing pressure for homes plus developed & undeveloped land (intended for the building of new homes). Further, the Company’s Home Building Operations are concentrated in the Southeast, which is “going through an unprecedented slowdown after years of strong growth, driven in part by speculative activity by individual investors.”
- In May, 2008 Levitt and Sons, LLC was in Bankruptcy Receivership under Kurtzman Carson Consultants, LLC. Its assets were sold to help repay creditors.
Levitt & Sons Inc. — The Original Levitt Homes
In 1947, Levitt Homes was the first “tract” home builder in the U.S. This later spawned an industry of non-custom home building that represents the majority of new homes built today. The largest Home Builders in the U.S. all build these types of homes. Today’s largest home builders are: D.R Horton, Lennar Homes, Pulte Homes, CalAtlantic (a merger of Ryland Homes & California Pacific Homes), NVR Homes, Toll Brothers, KB Homes (Kaufman & Broad) & Hovnanian Homes.
Abraham Levitt, and his 2 sons William (1907-1994) & Alfred Levitt (1912-1966) were the creators of Levittown, NY. Abraham started the company and made both William and his brother Alfred key executives.
- Abraham planned the landscaping with two trees per home, planted in the exact same location on each homesite. Abraham was so precise about lawn maintenance that he made frequent tours through the neighborhoods, making sure proper care was being taken of the greenery, and contacted home owners with infractions.
- Alfred Levitt (at age 17) became VP Of Design, and drafted plans Levittown. More importantly, Alfred was the one who crafted the 27-Step home-building process that allowed homes to be built at the pace of up to 150 per week.
- William Levitt(at age 22) became President. He handled: advertising, sales, and financing. William was also responsible for getting lawmakers to change laws that allowed Levittown, NY to become possible. William is the man most associated with Levittown, as he had the highest public presence.
William J. Levitt
Levitt Homes Got Its Start Building Military Housing
Newspaper Front Page Article: Attack On Pearl Harbor & The U.S. Enters WWII
WWII began with Nazi Germany’s attack on Poland in September 1939. The United States entered WWII after the Japanese bombed Pearl Harbor, Hawaii, on December 7, 1941. U.S. involvement lasted through the end of the war in Sept 1945.
Demand for resources during the WWII war effort created massive shortages. Vital materials, such as: metals, rubber, & oil were rationed to ensure enough supply for the war. In 1942, the U.S. Office of Price Administration (OPA) began rationing gasoline. To control the amount of gasoline used, OPA issued windshield-stickers to identify users. The sticker’s rating was based on the car owner’s need. To get a classification & ration-stamps, the car owner had to certify to a local board of their need for gasoline.
There were few homes built for several years prior to WWII (during the Great Depression). During WWII continued to be a time of little new home building. Also, there was no production of: cars, commercial trucks, or auto parts during Feb. 1942 — Oct. 1945. Most U.S. resources were reserved & needed to build military equipment. The war came first, and many day-to-day activities were second.
WWII Gas-Ration Windshield Sticker WWII Gas-Ration Card WWII Poster Advising Scrap Rubber Was Needed
In 1940, preparations for WWII included supplying housing for the large number of defense-workers & military personnel. Low-cost housing units had to be built in the vicinity of: mine depots, fuel depots, ordnance plants, powder factories, ship yards, and supply bases.
By July 1940, Norfolk, VA was inundated with defense-workers & and members of the military. In August of 1940, President Roosevelt approved the construction of 500 homes at Norfolk Naval Base, called Merrimack Park. Housing was was ready for occupancy in 48 days! The attack on Pearl Harbor on December 7, 1941, placed additional priority on the construction of more housing. The military-housing shortage for defense-workers became critical.
Photo Dated Jan 1941 Shows Merrimack Park Military-Housing Under Construction
In 1941, the Levitt’s won a government contract to build 2,350 military-housing units near the Norfolk Naval Station in Norfolk, Virginia. This is where the Levitt family began and perfected the future Levittowns home-construction techniques. Brother Alfred Levitt created the mass-production techniques & designed the homes.
In 1944, William Levitt, wife Rhonda, son William Jr. (10) and son James (infant), were sent to Hawaii as a lieutenant in the Navy Seabees. William was the personnel manager for 260 men in the Navy construction unit. While William was in Hawaii, his father temporarily took over as company president, and began planning to build Levittown, NY, a community of low-priced homes on Long Island (Nassau County) New York. After the war’s end, William returned home and became the financier & promoter. He also persuaded lawmakers to rewrite the laws that made Levittown possible.
At the end of WWII, Demand For New Homes Was Greater Than Ever In U.S. history.
When WWII ended, over 16 million WWII Veterans returned home, and a major housing-supply crisis ensued. In order to meet the enormous demand, a desperate need existed for a new way of construction that would allow for mass-production of new homes. Levitt & Sons, taking lessons from the military-housing they built, stepped up to this need.
Levitt & Sons Homes was the first to mass-produce homes, and created a legacy for the company that lives on 70 years later. Not only did this new way of building homes respond to housing-demand of that era, it continues to be how the majority of new homes are constructed today.
Levitt & Sons built 3 enormous housing communities between 1947 — 1963:
- Levittown, NY 17,447 homes built during 1947-1952.
- Levittown, PA 17,300+ homes built during 1952-1958.
- Levittown, NJ 12,000+ homes built during 1958-1964.
Levitt Homes Ownership Over The Years
Levitt & Sons Logo 1947–1957
Levitt & Sons Homes Logo 1958–1964
Levitt & Sons Homes Logo 1965–1972
The Levitt brothers split their business affairs in 1954. William Levitt then took his company public in 1960. In 1961, the company lost $763,000 on sales of only $15.9 million. In response, William quickly changed operational tactics. Levitt: reduced the size of new home communities, dabbled in townhouses, delegated authority & decentralized management. By 1967, Levitt had achieved record sales $93.6 million, with $4 million in profit. By 1968, there were 18 smaller Levitt developments under construction in: Illinois, New York, New Jersey, Maryland, Virginia, Puerto Rico, and France
Washington Post Newspaper Article About Levitt Homes’ Belair at Bowie” in Bowie, MD
Townhomes Offered In New Jersey By Levitt & Sons Homes
ITT’s Ownership Of Levitt & Sons, & The Beginning Of A Rapid Decline.
Levitt Homes Logo While Owned By ITT
In 1968, Levitt & Sons was sold to International Telephone & Telegraph (ITT) for $92 million of Itt Stock (around $705 million in 2017 dollars). ITT changed the name to Levitt Corp. As an ITT subsidiary, Levitt Corp. continued to build housing developments under a variety of names that usually included “Levitt”.
Levitt & Sons Decline After Being Sold To ITT
In the 1960s, ITT made huge number of acquisitions including: Avis Car Rental, Continental Baking Co. (Twinkies); Sheraton Hotels, Levitt & Sons Homes and many others. ITT’s revenues increased from $800 million to $22 billion, and the conglomerate became the 4th largest employer in America.
Levitt & Sons fortunes began to rapidly plummet soon after its purchase by ITT. Some blamed ITT for selling off Levitt’s land-holdings, while others saw problems due to ITT mismanagement, and the declining reputation of ITT.
Under ITT’s direction, Levitt & Sons continued to offer site-built detached single-family homes. Additionally, there were factory-built: modular apartments, attached townhomes, and mobile homes. ITT also began selling Levitt’s land holdings in Florida. By 1974, Levitt was in deep trouble. In 1974, ITT gave Levitt Homes $51.3 million, to cover operating-losses on sales of of only $140 million. Between 1968–1975 Levitt & Sons lost $400 million.
In 1975, Palmieri & Co. took control Levitt Homes, under a court order to dispose of it. The sale was to settle a Federal Antitrust Lawsuit against ITT. In 1976, William Levitt cut all remaining ties to the company. Palmieri & Co. rid the company of its remaining debt (about $100 million) by disposing of two-thirds of Levitt Corp’s assets, which included its palatial Long Island headquarters at Lake Success, New York.
In 1975, with the details of ITT’s sale of the majority the Levitt & Sons assets settled, William Levitt signed a letter of intent to buy back Levitt and Sons and operate it under its original name. At the time, estimates of the company’s value were $10-30 million (ITT paid $92 million for it in 1968). William Levitt’s purchase of Levitt never occurred.
During the sell off of Levit Corp’s assets, ITT bought $57.5 million of those assets (mostly land). Also, Levitt’s interests in: apartment building, mobile homes, & factory-built housing were abandoned. Lastly, the single-family home building operations in: France, Spain, + several U.S. cities were sold. At that time Levitt & Sons was actively selling homes only in: Chicago, Washington DC, Florida, and Puerto Rico. In 1976 Levitt Corp., had net income of $2.2 million on sales of $56.5 million. In 1977, Levitt Corp’s earnings rose to $4.4 million, on sales of $88 million.
Starrett Corporation’s Ownership
Levitt Homes Logo While Owned By Starrett Corporation
In 1978 Starrett acquired what remained of Levitt Corp. for $30 million (ITT previously bought $57.5 million of the company’s assets – mostly land). Starrett was a general contracting company that built, among others, Trump Tower in New York. After the purchase, Starrett received only 45% of the $213 million it was due (from already sold condominiums at the time of Starrett’s purchase).
Home building suffered during the 1981–82 recession. In 1982, the Levitt subsidiary’s provided 2/3 of the Starett Corporation’s total revenue, with Starrett losing $1.4 million. In 1983 Starrett sold 20% of Levitt to raise funds. By 1983 the U.S, economy has moved into recovery. Levitt’s new line of houses (priced $49,000–87,000) were a success, and the Levitt subsidiary became profitable again in 1983. By 1987, Levitt’s sales passed the $100 million mark. In 1988 Levitt was the largest home builder in Puerto Rico, with nearly all its its profits coming from the Puerto Rico operations. In 1989 Starrett reacquired the 20% percent stake in Levitt it had sold.
BankAtlantic Corporation’s Ownership
In 1999, Starett’s holdings in Levitt Corp. were purchased by BankAtlantic Corporation. Levitt Corp. became a subsidiary of BankAtlantic.
Levitt & Sons LLC Becomes A Public Corporation Again
On Dec. 31, 2003 BankAtlantic Bancorp, Inc. spun off Levitt Corp. as a public corporation. BankAtlantic Corp. and Levitt Corp. became separate legal entities.
On Jan. 1, 2004, Levitt Corp. begins trading on the NYSE. A new name, Levitt and Sons LLC, was established as one of Levitt Corporation’s subsidiaries, to develop residential home communities.
Levitt & Sons LLC Files For Bankruptcy
Last Levitt Homes Logo – 2007
In Nov. 2007, Levitt and Sons, LLC (Home Building Operations) and 37 of its subsidiaries filed for Chapter 11 Bankruptcy protection in Fort Lauderdale, FL.
A press-release from Levitt and Sons LLC stated: “Excess supply, particularly in previously strong markets like Florida, has led to downward pricing pressure for homes, and also for both developed & undeveloped land (intended for the building of new homes).”
“Further, the Company’s Home Building Operations are concentrated in the Southeast, which is “going through an unprecedented slowdown, after years of strong growth driven in part by speculative activity by individual investors.”
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