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Prudential Insurance and Housing Development

The Prudential Insurance Company of America, established in 1875 in Newark, New Jersey, introduced to North America industrial insurance, a weekly premium insurance offered in small amounts and tailored to the wage earner. Prudential's close connection to the working class informed corporate initiatives to improve the home and civic environments of their policyholders. The company's financial success led it and other insurance companies to invest in housing through mortgage lending, and from the mid-1920s through the 1950s, in equity ownership of urban housing projects. As both social and financial institutions, life insurance companies have exerted widespread influence on cities through investment in infrastructures, private building initiatives, and civic and health programs.

Mortgage and Infrastructure Investments

After acquiring widespread public acceptance in late-19th-century America, the life insurance industry sought investment opportunities for its cash assets. It developed an intensive fiscal relationship with major urban centers, directing its vast surplus of accumulated premiums into railroad bonds and mortgage loans, public bonds and real estate, conservative investments in which the principal was secure and the return guaranteed.

Prudential invested its surplus in government and commercial bonds, as well as mortgage loans to companies and individuals. In this capacity, Prudential backed projects of the Port of New York Authority, purchasing bonds for the George Washington Bridge, the Holland and Lincoln Tunnels, and the city's integrated system of airports. It purchased large quantities of government bonds in wartime, and in times of economic growth its investments financed public utility companies and corporate expansions, such as those of AT&T and Burlington Mills.

At the same time, Prudential developed regional offices and relationships with banks to manage small farm, business, and residential loans and mortgages. Housing finance focused the industry's financial and welfare efforts emphatically on the family and the home, two central concepts of life insurance culture. The family was the fundamental social unit of the life insurance contract, and the industry believed that homeownership fostered social stability by engendering the values of thrift and family and civic responsibility.

Urban Housing Projects

From the 1920s through the mid-1950s, life insurance companies also devoted a portion of their ample resources to the design and full ownership of urban housing projects. A life insurance boom and companies' resultant search for new investments combined with the social and political concerns of postwar housing shortages, the loss of jobs in the 1930s, and efforts to revitalize cities to forge collaboration between public and private agencies. State insurance code amendments authorized direct housing ownership, and a variety of legislation on the state and city levels made possible a range of project types, from slum clearance ventures to construction on undeveloped land, from wholly private endeavors to complexes that depended on the public power of eminent domain, tax exemption, and other public monies and services. Legislation was also restrictive, frequently mandating a maximum amount of investment, a specified rate of return, length of ownership prior to and after completion of housing construction, maximum rental rates, and the nature of the site to be acquired.

While life insurance companies' housing projects were informed by the industry's mandate to promote civic and family responsibility, thrift, and public health, the industry's innate social conservatism and a mandate to realize profit on their investment precluded such socially ambitious measures as racial integration and the housing of the poor and homeless. However, a number of projects were significant as explications of formal models advanced by sociologists, planners, and architects, and thus made significant contributions to the discourse about housing among design professionals, legislators, and the public.

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