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We heard earlier in the program from NPR's Jim Zarroli on the failures of some of America's biggest financial institutions, failures set off by the crisis in the housing market. Our business reporter has also been looking at one positive development in housing: the return of the prefab. Prefab homes have long held out the promise of both affordability and innovation, and some of the world's most famous architects have tried to design houses that can be built like cars on an assembly line. An exhibition at the Museum of Modern Art in New York explores the history of those ideas, and the attention comes as computer design is revolutionizing the way prefabricated houses are constructed. Here's Jim Zarroli.

JIM ZARROLI: The first documented prefab house was the Manning Portable Cottage. It was built in the 1830s by a London carpenter whose son was emigrating to Australia. Peter Christensen is curatorial assistant in the architecture and design department at the Museum of Modern Art.

Mr. PETER CHRISTENSEN (Curatorial Assistant, Museum of Modern Art): He wanted his son to have a comfortable dwelling, and they had no idea what they could expect in terms of building materials in this very distant land. So the house was really designed to be packed on a ship, unloaded by two mules in Australia, and then assembled.

ZARROLI: The idea proved so successful that Manning sold dozens more cottages. But it wasn't until 1908 that prefab really caught on. That's when Sears Roebuck introduced the kit house, which could be ordered by catalog. A hundred thousand were sold. After World War II, the Lustron Corporation sold an all-steel house made in a military aircraft factory. Christensen said the house had its fans.

Mr. CHRISTENSEN: People celebrated the fact that the house was entirely magnetic. And they had magnets everywhere to sort of emphasize that to everyone, and show...

ZARROLI: It's like one big refrigerator door.

Mr. CHRISTENSEN: Exactly. And illustrate how their house was so different from everyone else's.

ZARROLI: But with its exterior of porcelain-enamelized steel tiles, the Lustron house looked a lot like a White Castle restaurant.

Mr. CHRISTENSEN: Time Magazine, in an article in 1949, likened living in a Lustron to living in a hot dog stand. So it was hard for a lot of people to stomach the sort of unadulterated embrace of a new material and a new technology, and a house that looked so alien.

ZARROLI: Today, a Lustron house has been re-created inside the Museum of Modern Art. Over the years, a lot of architects have seen prefab as a way to bring good design to the masses cheaply. Frank Lloyd Wright, Le Corbusier and Walter Gropius all tried their hands at designing prefab houses. To see their designs is to be dazzled by their sheer inventiveness. There are futuristic pod houses and modernist boxes on stilts that can be packed up and moved to a new site whenever the owner wants. Thomas Edison built all-cement houses from a single giant mold. They were sure sturdy, but over time they tended to crack. Yet, for the most part, these projects never got off the drawing board. With the huge up-front cost of building a factory, they often proved a lot more expensive to build than anyone expected.

(Soundbite of archive advertisement)

Unidentified Announcer #1: At Wichita, Kansas, in the very center of the United States, the housing problem brings out a circular dwelling built of aluminum and plastic.

ZARROLI: When Buckminster Fuller built his domed Wichita house in an aircraft factory, he had to downplay its prefab origins to attract investors.

(Soundbite of archive advertisement)

Unidentified Announcer #1: This home of living room, two-bedrooms, two baths and a kitchen can be economically produced and will contain a compact heating and air-conditioning unit.

ZARROLI: By the 1960s, most of the prefab houses built in the United States were mobile homes. But today, prefab is being embraced by more and more designers, part of the renewed interest in midcentury modernism. Sam Grawe is editor in chief of Dwell magazine.

Mr. SAM GRAWE (Editor In Chief, Dwell Magazine): It's gone from being the scary double wide on the highway to being something that is seen as rather stylish or in fact a way around some of the problems that are associated with conventional methods of building.

ZARROLI: So, I'm standing at the Nehemiah Spring Creek Housing Development, which is being built in southern Brooklyn. There's a row of townhouses going up here. They are done in a very kind of sleek, contemporary, unadorned style. It's a little bleak here right now. Nobody has moved in yet. But there are some workers across the street who are, it looks like, putting some finishing touches on the facades of the building, on the brickwork and also on the windows. And I'm standing here with...

Mr. VINCENT LINARELLO (Project Architect, Alexander Gorlin Architects): Vincent Linarello, Alexander Gorlin Architects.

Mr. MICHAEL CAROLO (Project Manager, Monadnock Construction): Michael Carolo with Monadnock Construction.

ZARROLI: So, tell me how these units are built.

Mr. CAROLO: They are manufactured in the Brooklyn Navy Yard, basically built out of - it's all steel and aluminum construction. They are then trucked out to the Nehemiah project on flatbed trucks, and then lifted with cranes floor by floor onto the foundation structures that are already installed when they get out here.

ZARROLI: So, they are built whole at the Brooklyn Navy Yard, and then brought - and what do they look like when they come out here?

Mr. CAROLO: The exterior just has to be completed, but the interiors are 100 percent complete - lighting fixtures, tile floors, pretty much virtually done when they get out here.

ZARROLI: This project is featured in the Museum of Modern Art's exhibition. Because these townhouses are designed by computer and built en masse in the Navy Yard, it's easier to calculate just how much materials the builders need, says Michael Carolo.

Mr. CAROLO: Normally, you always have extra waste of materials. Waste of two-by-four materials or Sheetrock materials, wiring. And in a controlled environment in a building, that happens a lot less than it would out in the field.

ZARROLI: In other ways, too, computers are opening up huge new possibilities for prefab construction. They allow architects to customize a house for a buyer, then quickly cut and deliver the pieces needed to build it. That reduces the cookie-cutter look associated with prefabs since the 1960s. The museum has built five cutting-edge prefab houses on an empty lot next door. They include this shotgun-style house designed by the MIT computer labs specifically for post-Katrina New Orleans. The museum's curator, Barry Bergdoll, says it can be built by a few friends using rubber mallets in four or five days.

Mr. BARRY BERGDOLL (Curator, Architecture and Design, Museum of Modern Art): That high technology can be transferred from the brain trust of MIT to almost anywhere in the world, so that we could see technology going to, really, in a sense, to the developing world, to places that we don't associate with high technology.

ZARROLI: The dream of prefab has always been to make good homes that are also affordable.

(Soundbite of archive advertisement)

Unidentified Announcer #2: Low-priced homes, one of the most imperative demands of a rapidly expanding America.

ZARROLI: But the most innovative prefab houses today tend to be expensive, easily topping a million dollars. Architects are hoping technology will eventually help them bring the prices down. Jim Zarroli, NPR News, New York.

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