By 1945, national morale had reached nearly an all-time low. Having suffered through the horrors of a second World War and faced with the fear of nuclear annihilation, the fabric of American society had now become threadbare. With inflation poised to skyrocket and the memory of the Great Depression still nipping at its Achilles heel, America was trying desperately to tip the balances of economic growth in its favor. President Truman knew that he had inherited a delicate presidency. While many servicemen comforted themselves during the war with the images of dream homes, white picket fences, and manicured lawns straight from the pages of Life Magazine, millions of veterans returned from abroad only to live in the back seats of cars and in chicken coops. Faced with the worst housing shortage in U.S. history, Truman knew action was necessary.
Economists knew that a single industry would probably drive America into great economic prosperity, just as the auto industry had propelled the booming 1920s. Seizing this opportunity not only to reduce the housing shortage, but also to bolster the economy, Truman envisioned unprecedented growth led by an entirely new industry — prefabricated and manufactured housing.
As an extension of the war effort, the President appointed Wilson Wyatt as National Housing Expediter with emergency powers to solve the nation's housing crisis. Wyatt recognized immediately that conventional builders and entrenched real estate interests would never allow a new industry to emerge. He thus turned to the same wartime innovators that had converted U.S. manufacturing into efficient wartime production as a solution for the mass production of affordable housing. "For some groups… to build a house like a car, to build a house like an airplane, was a very, very fashionable and a very alluring idea — a way to solve social problems and to house every man," says Donald Albrecht, independent curator from Smithsonian Cooper-Hewitt. All efforts failed, however, until the spring of 1946 when an industrial genius, a gambler obsessed with the odds, appeared at the National Housing Agency. Staff members sat for hours in rapt attention as Carl G. Strandlund, a naturally gifted inventor and self-taught engineer from Chicago, unveiled his bold engineering vision for the Lustron house.
A Swedish emigrant, Strandlund successfully cajoled the U.S. government into subsidizing his vision, receiving over $40 million to pursue the production of affordable housing. "We were revolutionizing a whole industry," said Richard Jones, former Lustron vice president of sales. "We were saying with our house: 'You put down a hammer and a saw and pick up a wrench.'" Though radical in its use of porcelain enameled steel, the Lustron house — a one-story, gabled-roof ranch with a bay window and side porch — looked much like other postwar-era dwellings. Behind its traditional façade, however, lay the hopes and expectations for a new era in American housing.
The unprecedented scale and scope of Lustron's operations attracted intense interest and scrutiny from the press, the public, the government, and the prefabricated housing industry. The Lustron "experiment" in mass-produced housing represented a major test for prefabrication. Years of interest and anticipation regarding the "industrialization" of the housing construction process focused its attention on Lustron's strategy, structure, problems, and prospects. At last, the nation would see if a large, highly capitalized firm could usher in a new age of affordable factory-made housing. The efficiencies of mass production, integrated manufacturing, and economies of scale promised to lead the American housing industry away from its decentralized, undercapitalized, and inefficient past toward a level of rationalization and organization already found in most other sectors of industrial economy. As Senator Ralph Flanders (R-VT) observed in 1947, "if Lustron doesn't work, let us forever quit talking about the mass-produced house."
Skeptics soon became believers, and Washington opportunists marked Strandlund and Lustron as a target for quick money. With the plant fully operational and the house tested and approved, a handful of conspirators in and around the RFC went into action. Over the next several months, Strandlund was able to withstand a barrage of threats, shakedowns, and take-over attempts. In the end, though, he would never be able to deal with the political maneuvering that nearly destroyed him and which, consequently, set back the housing industry for generations to come.
Once hailed as the best hope for the industrialization of housing, by the early 1950s Lustron collapsed amid foreclosure and bankruptcy proceedings. The company had produced only 2,498 houses. Founded with the goal of providing affordable single family dwellings for wage earners, the "mass market" for mass production, the company ultimately was unable to provide a house which most wage earners could afford. Without access to the market segment which rationalized large-scale production, the Lustron experiment made little economic sense. Lustron's failure marked a watershed in the history of the American prefabricated housing industry. Although people did not "quit talking" about factory-made housing, enthusiasm for its role in the transformation of the housing industry at large markedly waned.
Lustron's brief, and often tumultuous, existence poignantly reflects the expectations, frustrations, triumphs, and follies of America society in the immediate postwar era. Lustron's plans to revolutionize the housing industry seemed well within the context of American assumptions about industrial progress and the promise of a prosperous future. Two of Lustron's national advertising slogans — "The House America Has Been Waiting For," and "Lustron: A New Standard for Living" — effectively expressed the nation's expectations for accelerated progress and for the idea of a house as the "just reward" for a successful fight to defend the American way of life. As historian John Morton Blum observed, "the house and all things that went into it, 'the American home,' best symbolized of all things material a brave new world of worldly good. The vision was in part… a romanticizing of desires born of depression circumstances and wartime deprivations."