After giving Westchester County in New York one last chance to comply with its demands over a central element of a 2009 fair housing settlement, HUD has decided it would take $7.4 million in grants to help low-income areas away from the county and send them to other communities.

HUD officials laid the blame on the county for not complying with its civil rights obligations. “HUD has tried to be a partner with the county, but the county is unwilling to comply with the terms of the settlement,” Deputy Secretary Maurice Jones said in a statement. “In choosing to disregard its civil rights and federal grantee obligations, county officials are depriving its citizens of funding for infrastructure improvements, programs for the youth and senior citizens.”

The grants were first held back and now will be reallocated because the county has not completed an analysis of impediments to fair housing, and particularly an analysis of zoning in Westchester communities, that HUD will accept. In giving the county a final chance to keep the money last week, HUD said the county had to agree to put language in the analysis acknowledging that zoning in some places may exclude potential residents based on race, national origin, or family status. The county refused and has been challenging the reallocation in federal court. After a judge dismissed its case, the county filed an appeal.