To the Victor, the Loss

"I'm a beneficiary of the capitalist system," says George Deffet, the 40-year-old head of a $30 million-a-year construction and real estate development company that he built from scratch in Columbus. Deffet has profited to the tune of a $17 million personal fortune, but he adds: "If the benefits can't be made available to others--because of the color of their skin or whatever--then dammit, our system doesn't work."

Deffet has made the System work for him, despite being that rare builder: an ardent advocate of open housing. As a teenager, he worked two summers as a railroad section hand and got to know poor blacks. Out of that experience has grown his conviction that everyone ought to share well in the rewards of the System. Deffet was born and reared in Columbus, attending Catholic schools and later the University of Dayton for two years. After an Army hitch in an Alaska ski troop and several years in his father-in-law's Columbus real estate business, he struck out on his own with $10,000 in borrowed money. Now, twelve years later, a modishly dressed Deffet operates from a plush, mahogany-paneled office.

From a broker specializing in trading homes, Deffet became a builder. His success has been based on shrewd decisions about where to build, careful use of credit leverage available in real estate, and a timely merger with a paving and contracting firm. His refusal to discriminate has been no hindrance. As far back as 1963, long before federal open-housing laws existed, he was advertising each of his apartment projects as a "fair housing community, which practices open occupancy to all."

Bruising Battle. His firm, Deffet Companies, concentrates on building and sometimes operating big housing and apartment complexes as well as office buildings. It has building projects under way in 13 cities and in six Midwestern and Southern states. On at least one of these, the 124-unit Ivy Wood development in Columbus, Deffet will have to take a loss. Any profit from Ivy Wood, a federally subsidized, low-and moderate-income project, has long since been poured into legal fees and other costs of fighting a bruising four-year battle with residents of the adjacent white, middle-class village of Minerva Park.

This month the Franklin County Court of Appeals dismissed the residents' second appeal of a lower court decision denying an injunction. They had sought it to block Ivy Wood construction on the ground that the project would alter surface drainage and hurt the village. Ivy Wood, for which the N.A.A.C.P.'s National Housing Corp. is the nonprofit sponsor, will be completed. "What we were doing was morally right," says Deffet, "but we cannot build another Ivy Wood. We can't afford it."

Deffet is also convinced that the day of federally subsidized housing developments like Ivy Wood is past. "The high visibility of this housing makes people think that their suburbs will be turned into slums," he explains. Deffet has just finished a 54-unit complex for the Urban League that stands alone in a downtown Columbus area, and he believes that even that project, with none of Ivy Wood's difficulties, was a mistake. "The way things are, these projects have to be built in areas where they are the least likely to offend, in a poor urban setting or in out-of-the-way places. That only tends to increase the problems that low-income people face."

If future Ivy Woods are doomed by the fierce opposition of white suburbanites, Deffet argues, then there should be federal housing subsidies paid directly to the poor to allow them to compete with everyone else for available private housing. Many of Deffet's industry colleagues over the years have either turned a deaf ear or become angry at his views. Now developers generally tend to listen to Deffet because of his track record. "The only way to be a spokesman," he says, "is to show people that you are successful."

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