{"":"A History of Operation Breakthrough"}
Operation Breakthrough was one of the most ambitious attempts at industrializing homebuilding in US history. It aimed to transform how houses were built by bringing mass production techniques into the housing industry. The program ran from 1969 through 1974, a project of the newly-established Department of Housing and Urban Development. Despite its ambitions, Operation Breakthrough ultimately failed in its goals. Within a few years of the program concluding, most systems developed by Breakthrough were no longer in production. Prefabricated construction today is a smaller share of US homebuilding than it was in the 1960s before the program began.
By examining what went wrong with Operation Breakthrough, we can better understand why industrialized homebuilding has struggled to take root — and what overcoming these barriers might require.
The Housing Crisis of the 1960s
In the 1960s, the US faced a projected housing shortage. While homebuilding had grown rapidly following WWII — rising from 325,000 housing starts in 1945 to 1.9 million in 1950 — demand was growing even faster. Birth rates rose from 2.2 children per woman at the depths of the Great Depression to 3.6 children per woman by the end of the 1950s.
By 1960, the US had a population of just under 180 million, up from 140 million in 1945. Projections estimated the population would reach 250 million by the mid-1980s and over 300 million by the year 2000. These millions were moving increasingly to dense cities and metro areas.
In a March 1965 address to Congress, President Lyndon Johnson stated that by the end of the century, the US needed to build as many new homes as had been built since the arrival of the first colonists on American shores. In the same Congressional address, Johnson called for the creation of a Department of Housing and Urban Development.
The new cabinet-level agency would be formed from the existing Housing and Home Finance Agency, which had been created in 1947 as an amalgamation of several other US housing programs. Within this new department would be an Institute of Urban Development to research technology that could reduce the cost of housing construction.
The bill creating HUD passed in August 1965, but without the recommended research institute. However, Congress soon authorized the creation of a National Commission on Urban Problems — later known as the Douglas Commission — which would study problems in the homebuilding industry.
The following year, Johnson created a President's Committee on Urban Housing. This committee was led by Edgar Kaiser, son of famed industrialist Henry Kaiser and former general manager of Kaiser's enormously productive wartime shipyards.
Both commissions studied ways to reduce housing construction costs and considered whether prefabrication and mass production were viable strategies. The Douglas Commission noted that while prefabrication had resulted in some cost declines, no major breakthrough had occurred. With proper encouragement, this might change:
"The production of new products for the construction industry, experimentation with new materials and new production techniques, and exploration of advanced systems approaches to buildings, should be encouraged."
Kaiser's presidential committee similarly noted that while the housing industry was more efficient than commonly believed, it was still "less dynamic and more resistant to change than most other major industries" and "conspicuously requires stimulation through judicious public policies."
As these reports were being prepared, Congress took further steps to stimulate US housing production. The Housing and Urban Development Act of 1968 allocated billions of dollars for housing development with the ambitious goal of creating 26 million new housing units over ten years — at 2.6 million new homes per year, more housing than had ever been built in the US.
Most of the bill involved modifying or expanding existing government housing programs. However, one amendment — Section 108, later known as the Proxmire amendment — aimed to "encourage the use of new housing technologies in providing decent, safe, and sanitary housing for lower income families."
Per Section 108, HUD was required to create up to five plans for new housing technologies, build at least 1,000 units using each type, and study costs and benefits.
HUD sought recommendations from the National Academies of Sciences' Building Research Advisory Board (BRAB). BRAB recommended testing several homebuilding hypotheses: that major technological changes could dramatically improve productivity and reduce cost; that these changes required large, aggregated housing markets assembled by reducing fragmented building codes and zoning requirements; and that mass-produced homes would be acceptable to both residents and communities.
The BRAB report strongly suggested the program be experimental rather than a demonstration assuming conclusions were correct:
"The program should be viewed throughout the planning, implementation, and subsequent evaluation phases as objective experimentation; the undertaking should not be allowed to be characterized as demonstrations of foregone conclusions nor to foreclose the evolution of other financial, organizational, or technological developments in the housing industry."
But before BRAB's report was complete, changes in administration would shift how Section 108 was implemented.
Richard Nixon took office in January 1969 and appointed George Romney — Governor of Michigan and former CEO of American Motors — as Secretary of HUD. Romney had competed with Nixon for the Republican presidential nomination the previous year. Some speculated that Nixon may have nominated Romney to sideline a political rival.
Romney considered the Secretary of HUD position one of "untapped potential where he could improve America's cities and improve the cause of race relations." During his tenure, Romney conceived many new HUD programs and restructured the agency to help transform what he saw as a collection of separate bureaucracies into something more organized and coherent.
Operation Breakthrough was one such brainchild. The program was larger and more ambitious than the Section 108 program recommended by BRAB. Rather than merely building homes using new technologies, Breakthrough aimed to reorganize the entire country's system of housing production.
"What we are trying to do," said Romney, "is focus not only on technical ingenuity, but the whole concept of modern industrial management on each stage of the problem — The identification of markets; the identification and more effective use of available land; the design of the product and its environmental situation; and its financing and distribution to the consumer."
Romney's background was in automobile manufacturing. He strongly believed mass production methods were the answer to America's looming housing crisis — all that was needed was to clear obstacles preventing them from succeeding.
Operation Breakthrough was directed "not only at technological advancement of housing," but at "breaking through the various nonhardware constraints to more efficient production of housing." To do whatever it took to industrialize homebuilding on a large scale.
The program would be a three-phase effort. In Phase I, HUD would solicit designs for industrialized housing systems — housing built in factories or using factory-like methods — and develop the most promising ones. In Phase II, chosen systems would be constructed on several sites around the country to test performance, see whether consumers would accept them, and demonstrate the systems to prospective developers. In Phase III, large-scale production of the best performing systems would be undertaken.
Concurrently with these phases, HUD would work to create aggregate housing markets that could absorb large volumes of industrially-produced housing. This involved working with state and local jurisdictions to relax code requirements, developing evaluation criteria so developers could be confident houses built using novel technology would be "safe, sound, and durable," and working with labor unions to accept the use of prefabrication.
To administer this program, Romney appointed former NASA administrator Harold Finger. On the eve of the first human moon landing, just months after Romney's arrival at HUD, they began to build their housing moonshot project.
Phase I: The Request for Proposals
In June 1969, HUD sent a Request for Proposal (RFP) for industrialized housing systems to over 5,000 organizations around the country. Respondents could submit proposals in two types: Type A — well-specified systems for entire buildings — or Type B — systems that either had not yet been fully developed or were for only part of a building.
Proposals could be for any type of housing system, from single-family homes to high-rise apartment buildings. Responses were due in 90 days.
Despite the short window, HUD received 632 proposals, many more than anticipated. Of these, 244 were Type A proposals — whole-building systems that were ostensibly fully developed.
The proposals were for a broad array of different housing types: single-family homes, townhouses, multifamily apartments. They were submitted by various organizations: existing large-scale homebuilders like Levitt and Sons; existing prefabbers like National Homes and Scholz Homes; manufacturing companies outside the homebuilding industry including General Electric, Martin Marietta, and Westinghouse; architects, universities, and building product manufacturers.
Some systems used volumetric modules — large boxes — while others used panelized construction, sometimes in exotic arrangements. A system by architect Aitken Collins and Associates used foldable plastic sandwich panels to form a sort of three-dimensional A-frame, which could be erected in 2 to 6 hours "manually or with helicopter assistance."
Systems used both conventional building materials — wood, concrete, steel — as well as more exotic ones like plastic and carbon fiber.
Of the 244 Type A proposals, 22 were selected by a government panel to proceed to Phase I. Systems were chosen on whether they would be sufficiently practical and durable, whether they could cope with different site conditions, and whether the submitter had necessary organizational and financial resources to actually produce the proposed system in volume. Selections ensured breadth of different housing types, costs, materials, and degree of innovation.
The Failure
Despite this ambitious start, Operation Breakthrough ultimately failed in its goals to shift US homebuilding into a regime of industrialized building. Critics might note that the program faced significant challenges: aggregating demand across fragmented markets proved difficult; developing evaluation criteria for novel technologies required navigating complex regulatory landscapes; and convincing both consumers and communities to accept mass-produced homes was harder than anticipated.
Still, the core lesson from Operation Breakthrough endures: technological solutions alone cannot overcome deeply entrenched market fragmentations, regulatory barriers, and resistance to change within the housing industry. The program demonstrated that industrializing homebuilding requires more than just better building methods — it demands transforming how housing is financed, regulated, and accepted by society.