Industrialisation caused a revolution in the construction of housing as a result of the grave deficit in decent housing caused by the thousands of workers who migrated to booming factory regions.

One of the first entrepreneurs to concern himself with social questions was the early British socialist, Robert Owen. At the end of the 18th century he conceived an ideal town for his workers in the utopian tradition of the Renaissance. The idea, however, was never implemented. A textile manufacturer by the name of Titus Salt was much more successful in this respect. In 1851 he built an estate of terraced houses called "Saltaire" for his workers in West Yorkshire.

In France Charles Fourier developed similar ideas for cooperative production and housing. Following his example, in 1859, Jean-Baptiste Godin set up a housing estate next to his foundry in Guise, called "Familistère". This consisted of housing blocks several storeys high, each surrounding a large courtyard covered with a transparent glass roof and serving as a common space for all the inhabitants. Public facilities like schools, kindergartens and shops were integrated into the site.

The British town planner, Ebenezer Howard, responded to the uncontrolled growth of cities with the idea of the garden city. Influenced by the thoughts of the American writer Ralph Waldo Emerson, he propagated the philosophy of small towns integrated into the countryside, and consisting of single-family houses and community facilities. The land itself was to be owned in common. The concept was made reality in 1903 in the garden city of Letchworth in Hertfordshire. This was soon followed by another garden city in Hampstead, north London.

After the First World War the lack of places to live was so great that governments and corporative companies were compelled to invest huge amounts of money in housing construction. In Great Britain large estates of single-family houses were built; and in Germany blocks of flats where erected, preferably in long parallel lines placed in such a way as to allow sufficient daylight to reach each row. The blocks of flats often contained children's crèches, shops and laundries.

Cooperative philosophies were especially expressed in the housing blocks built in Vienna in the 1920s. The best known of these was the "Karl-Marx-Hof", a monumental "proletarian housing palace" consisting of five-storey houses, each of which surrounded a broad grassy courtyard. Shops and kindergartens, even libraries and post offices were also integrated into these fortress-like housing blocks in "Red Vienna". The Dutch constructed expressive housing blocks. At the start they were often made from traditional red bricks and occasionally crowned with a little tower: later ready-made concrete bricks with individually accented coloured facades were also used, as in the "Watergraafsmeer" garden city near Amsterdam.

By contrast, the housing estates erected by representatives of functional architecture contained cube-shaped houses with flat roofs and white rendering. Standardisation went so far that progressive aspects like facing the housing towards the sun or grassing over courtyards became background considerations once again, even in the housing estates designed by Gropius. In addition, Gropius, who still clung on to the ideal of cooperative housing, committed himself strongly to the building of tower blocks. This trend reached a climax in the work of the architect and artist Le Corbusier. His idea of a housing city was finally implemented in 1955 in the form of the "Unités d’Habitation" in Marseilles. This was a massive concrete edifice containing more than 300 housing units, connected by a network of "streets" and containing two floors of shops. Although it soon became clear that there were blatant deficiencies in the architecture, the site had a huge influence on housing construction.