JUSTICE DEPARTMENT SUES LAKE STATION, INDIANA FOR
BLOCKING TIMBERCREEK ESTATES SUBDIVISION
WASHINGTON, DC — The Justice Department today sued a Northern Indiana town
for blocking the development of a subdivision they believed would have attracted African
The complaint, filed in U.S. District Court in Hammond, alleges that the city of Lake
Station, Indiana, violated the Fair Housing Act by blocking the Lake County Economic
Development Corporation (LCEDC) from developing a subdivision intended for low and mid
income families due to fears that the subdivision’s residents would have been African
American. Lake Station, which borders the predominantly African American city of Gary, has
an African American population of .2%.
“The Fair Housing Act clearly outlaws municipalities from basing its zoning decisions,
even in part, on racial considerations,” said Bill Lann Lee, Acting Assistant Attorney General
for Civil Rights. “The Justice Department will step in when other government entities allow
racial prejudice to infect their official actions.”
In 1995, LCEDC, a community-based, non-profit development corporation, proposed
developing Timbercreek Estates, a subdivision of owner-occupied, single-family homes.
LCEDC planned to use Community Development Block Grant funding from the Department of
Housing and Urban Development (HUD) to help finance its construction. The financing would
have facilitated a modest reduction in the subdivision’s home prices. Although the reduction
would have made the homes affordable to lower income families, home buyers would not have
enjoyed any direct subsidy and would have had to obtain conventional mortgage loans from
A fair housing complaint was originally filed with HUD which investigated the case
with the Justice Department.
HUD Secretary Andrew Cuomo said the kind of action alleged in this case was very
troubling: “The Clinton Administration stands firm against housing discrimination of any
kind. We will not tolerate any actions that continue a home ownership gap as wide as the
Grand Canyon — dividing America into two societies, separate and unequal”.
The Timbercreek Estates proposal encountered fierce opposition from certain Lake
Station residents in 1995 and 1996. That opposition, the Justice Department contends, was
racially motivated and is what led Lake Station to deny LCEDC the development permit. Only
a few years earlier, the City approved a proposal by a private developer, Steve Tokar, to
establish a subdivision featuring a larger number of homes on the same plot of land. Tokar
decided to cancel his project before it got underway, and he sold the land to LCEDC.
The lawsuit claims damages for anyone affected by Lake Station’s prior actions,
including LCEDC. It also seeks a court order requiring the City to permit LCEDC to develop
the Timbercreek subdivision. At this point, any such development may be affected by a
moratorium which the Lake Station Board of Public Works declared in March 1997. The
moratorium forbids new construction of subdivisions requiring sewer tap-ins.