Upstate NY Legal Battle Underlines Hasidic Community Growing Pains

A simmering legal battle in the Catskills is throwing a harsh spotlight on the friction between expanding Hasidic Jewish communities and local governments across upstate New York. With federal agencies and state officials now weighing in, the stakes have risen sharply in what many see as a flashpoint for religious discrimination in America’s quiet towns.

This week, New York State Attorney General Letitia James issued a pointed letter condemning alleged efforts by the town of Forestburgh to block Hasidic Jews from developing housing. The allegations, said James, if proven true, “would violate the Fair Housing Act” and are “profoundly disturbing.”

“Discrimination on the basis of religion, race, national origin, or other protected characteristics — whether explicit or cloaked in pretext — is not only illegal but fundamentally un-American,” James wrote, throwing her support behind the U.S. Department of Justice, which has filed a federal statement of interest in the case.

At the center of the storm is a 2022 civil lawsuit filed in the Southern District of New York. Plaintiffs Lost Lake Holdings and Mishconos Mazah — both Hasidic-owned entities — allege that after purchasing land originally approved for a massive housing project, they faced an orchestrated campaign by Forestburgh officials to block development. The site, once approved for over 2,600 units by a non-Jewish developer, suddenly ran into what plaintiffs describe as obstructionism as soon as Hasidic ownership was revealed.

The alleged tactics included permit denials, illegal property searches, inflated property assessments to raise taxes, and a staggering 1,000% increase in local fees. Emails cited in the lawsuit add fuel to the controversy — including one in which a local official vowed to “make their lives miserable” and another likening Hasidic expansion to a locust plague.

James’s letter comes amid similar tensions across New York and New Jersey, where Hasidic Jews moving out of New York City in search of more affordable housing face pushback over school control, land use, and demographic shifts.

Forestburgh officials, however, deny any wrongdoing. In a letter responding to James, the town’s legal team claimed her characterization of events was “inaccurate or incomplete,” and insisted that zoning rules apply equally to religious and secular projects. They further noted that some of the most inflammatory emails referenced in the case date back to 2015 and were authored by private citizens, not officials.

“The Town categorically denies that any of its land use actions were based on the religious identity of the developer or potential homebuyers,” the letter stated.

Yet the context around Forestburgh paints a more complex picture. The region has a storied Jewish history dating back to the “Borscht Belt” era — when Jewish resorts flourished in the Catskills. But that golden age has given way to modern demographic shifts that have sometimes ignited resistance.

The lawsuit reveals a pattern of antisemitic sentiment surfacing in public comment threads, social media, and private communications. In addition to accusations of “dirty money” and the “Jewish mafia,” commenters referenced Kiryas Joel — a nearby Hasidic enclave that has long been a lightning rod for disputes about school funding, housing density, and political influence.

Plaintiffs say the backlash in Forestburgh is following that same script: zoning used as a proxy for religious bias, local fears of bloc voting, and efforts to preserve a “rural character” that coincidentally excludes Orthodox Jews.

The town’s lawyers argue that no final development approval had ever been granted to the plaintiffs or the previous owner, and that the updated plans were significantly different from what had been previously proposed.

Still, the financial damage to the developers has been substantial. With construction stalled and the land’s use severely limited, the companies are seeking not just monetary compensation but a reversal of the town’s obstructive measures.

The Department of Justice first entered the fray in 2023, citing its interest in enforcing federal housing law. The Biden administration doubled down in March 2025, linking the case to a broader push to combat antisemitism under a January executive order.

“Orthodox Jews too often face bias masked as bureaucratic decision-making,” James wrote in her latest letter. “Government decisions must be based on law and evidence — not bias, fear, or bigotry.”

For Hasidic Jews seeking housing outside urban cores, the stakes are personal and existential. As families grow and space in New York City shrinks, suburban and rural expansion is inevitable. But as Forestburgh and other towns show, the path forward is anything but smooth.

The court’s ruling — and the spotlight now placed on quiet zoning boards and local planning commissions — may ultimately set precedent for how America balances religious freedom, urban expansion, and small-town identity in the years to come.