The Department of Justice has filed a lawsuit against New Berlin, Wis., alleging that the city violated the Fair Housing Act by preventing the construction of an affordable housing development proposed by MSP Real Estate, Inc.

Filed in the U.S. District Court for the Eastern District of Wisconsin, the complaint alleges that the city blocked MSP’s plans for a 180-unit low-income housing tax credit development serving seniors earning no more than 60 percent of the area median income (AMI), with some reserved for those earning no more than 50 percent of the AMI.

The city planning commission approved the project on May 3, 2010. The mayor and other city officials then received numerous complaints about the proposal from residents.

“Some of the opponents expressed concern that the prospective tenants would be African-Americans or other minorities and used racially derogatory terms to refer to the prospective residents or implied racial bias as the reason for objecting to the development,” said the Department of Justice in a press statement.

The planning commission reversed its earlier decision and denied MSP’s proposal on July 12, 2010. The common council then denied a revised proposal on Jan. 25, 2011.

“At a time when so many families are in need of decent and affordable housing, it is imperative that unlawful discrimination not be a barrier to the construction of housing that is affordable for seniors and working families with modest incomes,” said Thomas E. Perez, assistant attorney general for civil rights, in a statement. “This case demonstrates our resolve to contest discriminatory actions by municipalities that unlawfully block the development of affordable housing wherever they occur.”

The lawsuit seeks a court order that would, among other things, require the city to approve MSP’s proposal to construct affordable housing in the city center and require it to take steps to prevent the recurrence of any similar discriminatory conduct. The lawsuit also seeks monetary damages for persons harmed by the city’s actions and a civil penalty. The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court.