Word: levitt
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Dates: during 1950-1959
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...Senate investigation into profits on Government-sponsored postwar housing, William J. Levitt, biggest U.S. housebuilder, took the stand last week. How, asked the committeemen, had he done on the thousands of houses he had built with Government-guaranteed mortgages...
...Builder Levitt answered readily that he had done very well. On the first 4,028 houses that he built for rent in Levittown, L.I., he made a gross profit of about $5,000,000, which remained in the Bethpage Realty Corp., builder of the houses. Later he sold the Bethpage Realty Corp. to Philadelphia's Junto, a charitable organization, for $5,000,000 and thereby paid only a capital gain of 25% on his profits instead of the much higher personal income tax (TIME, March...
Republican Senator Homer Capehart promptly called the transaction another example of a "windfall" profit, i.e., one gained by inflating the value of the mortgage on the houses beyond their actual cost of construction and pocketing the difference. Builder Levitt insisted that his profit was no such thing. He defined a windfall profit as one made by a builder when he pocketed the difference between the mortgage and the building cost and still retained title to the property, thus giving him the right to additional profits from sales or rentals. In his case, said Levitt, the $5,000,000 was simply...
...Levitt built under Section 603, which based the size of the mortgage on what the actual appraised "value" would be after the houses were built. Levitt said that he had made $1,200 gross profit on a house that was mortgaged for $7,500, that later sold for $7,200 and is now selling for $8,600. Levitt, who is probably the most efficient builder in the U.S., said that profits on houses that he built later without the help of Section 603 (but with Government-guaranteed mortgages) were "substantially more" than...
...Windfall. Levitt was followed to the stand by Builder Alfred Gross, who made no bones about the fact that he had reaped a windfall profit of $6,000,000, the largest uncovered by the Senate committee so far, on the $25-million Glen Oaks Village apartment houses in Queens, New York City. He explained how he-and other builders-had made such profits...