The U.S. Justice Department announced Thursday that it has settled a discrimination lawsuit accusing an Alabama housing authority of steering residents to different low-income communities based on race.

A federal judge this week approved the consent decree resolving the discrimination claims against the Housing Authority of Ashland and the private owners and agent of two of its low-income communities.

The defendants disputed the accusations of discrimination but agreed to make changes to settle the case, according to the consent decree.

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The Justice Department in 2020 filed a lawsuit accusing the defendants of steering Black applicants away from four overwhelmingly white communities in predominately white neighborhoods and instead directing them to two predominantly Black communities in predominately Black neighborhoods. The lawsuit said that Black residents accounted for 30% of all the Housing Authority's tenants but accounted for 65% and 73% of residents at two communities.

"Racial steering is a patently unlawful practice that destabilizes communities, fuels racial tensions, and perpetuates modern day racial segregation in communities across the country," Assistant Attorney General Kristen Clarke for the Civil Rights Division said in a news release.

Ashland is about 55 miles southeast of Birmingham.