How America’s affordable house of the future failed

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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.

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.

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.

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.

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.

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.