The wealthy township of Millburn, New Jersey, has lost a key battle in its fight to stop 75 affordable apartments from being built on the town dump.

Home to Short Hills, the state’s richest ZIP Code, Millburn had bet on convincing a court that the downtown site is toxic and would segregate low-income families from the rest of its residents.

Instead, a court-appointed special master is recommending the development go forward as the township had originally planned. Millburn agreed to the site three years ago to satisfy New Jersey requirements for each town to build affordable homes, only to backtrack.

Like the rest of the New York City area, Millburn is suffering from one of the worst housing shortages in the U.S. Short Hills, its largest community, has seen median home values rise almost 50% in the past four years to $2.1 million. Only 34 properties in Short Hills are on the market, out of a population of about 14,500.

New Jersey has required quotas of affordable housing from each town thanks to a series of court decisions stretching back almost 50 years, but they’re often challenged by wealthy municipalities seeking to slow or block the process. Few have put up a fight quite like Millburn, which voted local officials into office last year to fight development of the dump site. 

The township in Essex County, favored by bankers and lawyers, says it’s not opposed to the 75 units but wants to move them to two other areas of the downtown. That’s just another delaying tactic by Millburn, according to Fair Share Housing Center, which fought the township in court to force it to comply with the state’s affordable-housing laws. 

Millburn has built only 38 of the more than 1,300 units mandated by law, according to the center.

New Jersey Superior Court Judge Cynthia Santomauro ruled in April that Millburn acted in bad faith by refusing to move forward with the affordable-housing site, and appointed special master Francis Banisch to recommend by June 1 where the 75 units will go. 

Banisch said in his May 31 report that the dump site has undergone “extensive planning efforts,” and that it’s hard to see how the new sites proposed by the town “can proceed faster than a site that is already properly zoned with a refined concept plan.” 

It isn’t clear what steps the judge will take next based on the recommendations, said Josh Bauers, an attorney for the Fair Share Housing Center. However, “we think that this recommendation means that the township will now be required definitively and unambiguously to move forward with the site,” he said.

Millburn Deputy Mayor Frank Saccomandi said the special master’s report is disappointing, contains factual inaccuracies and that it suggests the town should proceed with an “ill-conceived” and “income-segregated” project.

“It is my belief that segregated housing is morally wrong,” he said. “Millburn presented a superior alternative for inclusionary development and remains committed to fulfilling its fair-share housing obligations. Litigation is still ongoing.”

This article was provided by Bloomberg News.