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NYC Gazette

Sunday, March 9, 2025

Lessons from levittowns: Impact on modern US housing issues

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Nouriel Roubini, Professor of Economics and International Business at New York University's Stern School of Business | New York University's Stern School of Business

Nouriel Roubini, Professor of Economics and International Business at New York University's Stern School of Business | New York University's Stern School of Business

The cost of housing has become a significant concern in the United States, particularly for young adults aged 18 to 27. A survey conducted last summer revealed that over 90% of this demographic considered housing affordability an important factor in their voting decisions during the presidential campaign. This concern is not unfounded, as single-family home prices rose by nearly 6% in the fourth quarter of 2024 compared to the previous year. The increase in housing costs was exacerbated by a rise in mortgage rates, which reached 6.6% at the end of 2024.

Despite a four-year high in houses for sale last November, Bankrate noted that "the US has failed to keep up with the housing demands of a continually increasing population," affecting millennials significantly. The current situation is reminiscent of the mid-20th century when housing shortages were so severe that unconventional living arrangements were advertised.

In response to post-World War II housing needs, real-estate developer William Levitt initiated large-scale developments known as Levittowns starting on Long Island and later expanding to other states and even internationally. Despite rapid construction, demand remained high, with couples taking only minutes to choose homesites and secure loans.

However, Levittowns faced criticism for racial segregation and promoting conformity while contributing to today's high housing prices. NYU historian Edward Berenson remarked on Levitt's influence: “The massive Long Island housing project that made so many people happy also made Levitt the largest and most influential homebuilder in the United States.”

Berenson discussed how federal support under the GI Bill helped veterans purchase homes but acknowledged potential criticisms labeling such aid as "socialism." He explained that government intervention primarily supported private builders rather than public projects.

Levittowns also appeared outside the continental US, including near Paris. These French communities differed culturally but shared similarities with American counterparts, according to Berenson. In France, where homelessness rates were high post-war, single-family homes became desirable alternatives to hastily constructed high rises.

Racial covenants were prevalent in Levittowns despite being outlawed later under the Fair Housing Act. Berenson noted Levitt's role in perpetuating segregation: “He created a permission structure for other home builders to do the same thing.” However, integration eventually occurred in some communities like Willingboro (formerly Levittown), New Jersey, after legal challenges forced changes.

Reflecting on today's housing issues, Berenson highlighted how post-war solutions contributed to current problems due to inefficient land use practices established by developers like Levitt. While his approach met immediate needs then—when land was abundant—it limits modern efforts toward denser urban development amidst growing populations.

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