7 News Archive
Profits: now you see them, now you don’t

By Ulli Diemer

A private developer seems to be moving quickly into the non-profit housing field.

The developer – Del Zotto Enterprises – is working through a separate organization – the Cimpello Charitable Foundation – and is seeking funding from the federal government’s Central Mortgage and Housing Company (CMHC) to develop non-profit housing.

The Cimpello Foundation was set up with the co-operation of members of the Ontario Credit Union League and Del Zotto. The non-profit housing to be built by the foundation would be built on Del Zotto owned land, by a Del Zotto property management firm (Del Realty).

Critics of the scheme charge that the “organization (Cimpello) appears to have been set up to allow a private developer to make a profit out of the non-profit housing program.”

The particular developer, Del Zotto, has been embroiled in controversy a number of times. Five years ago Del Zotto Enterprises was mentioned during the Royal Commission on Certain Sections of the Building Industry. They have also recently been linked to anti-union activity.

A private developer would not be eligible for the kind of government assistance to non-profits that Cimpello is seeking. However, because Cimpello is separately incorporated as a non-profit foundation, it is eligible.

Critics of Cimpello (who include various non-profit and co-op housing groups) are also angry at the involvement of the Ontario Credit Union League. In this setup, non-profit organizations of various kinds, and co-operatives, deposit their funds with credit unions rather than banks because they see credit unions playing a more positive social role.

Opponents of Cimpello’s involvement point out that Cimpello’s proposed projects leave no room for tenant management, something that has been seen as a goal by activists in housing field.

In fact, one of the projects which Cimpello is most actively pursuing is in the Grange area, where it is directly competing with the residents, who are trying to set up a housing co-operative (Grange Area Co-operative Homes Incorporated).

However, credit union officials defend their involvement. Paul Meehan, a loans officer for the Ontario Credit Union League, and a member of the six-member Cimpello board of directors, says that “I welcome Del Realty’s proven expertise in property management.”

The Ontario Credit Union League does not look very favourably on co-ops as a matter of policy. As they explain in a position paper submitted to the Co-op Housing Federation of Canada, their prime goal is supporting individual home ownership. Co-ops are not a priority, although the League says it supports them if some one capable is in command. However, says Meehan, “there are just not enough trained property managers in the co-op housing field.” The League also sees them as less desirable because residents do not acquire personal equity in the property.

Non-profit housing supporters now fear that the involvement of large private developers in the field will result in the much smaller co-operative groups being squeezed out in the competition for funds, with the result that new tenant-managed projects will be harder and harder to build. Says one co-op activist, “They’ll elbow us away from the trough faster than you can oink.”

Published in Seven News, Volume 10, Number 8, 5 October, 1979.

Related topics:
Co-operative Housing
Credit Unions
Non-profit Housing
Non-profit Sector
Real Estate Development