NY Suburb Settles Discrimination Suit

Westchester County, is just outside New York. It's one of the richest counties in the country, and one of the whitest. The groundbreaking lawsuit charged Westchester County with failing to live up to its obligations to provide affordable housing as CBS News Chief National Correspondent Byron Pitts reports.

"They never tried to overcome barriers to fair housing that are based on race or based on municipal resistance to affordable housing," said Craig Gurian of the Anti-Discrimination Center of Metro New York.

Westchester County stood to lose up to $180 million dollars in federal funds if they lost this case, filed three years ago. Instead, they settled, admitting no wrongdoing but agreeing to major changes in seven years.

The county will spend almost $52 million to develop 750 affordable housing units that have to be marketed outside Westchester. At least 84 percent of those homes need to be in mostly-white communities. Neighborhoods where some minorities say they've felt unwelcomed.

The new housing isn't set aside for minorities. It's based not on skin color but on a moderate household income: $53,000 for a family renting, $75,000 for a family owning.

Larchmont, NY mayor Liz Feld says they're not small-minded, just a small town.

"We're a one-square-mile village, we're particularily small. Which makes it very challenging. We can't find housing for our own workforce."

The lawsuit has a national impact. More than 1,200 communities across the country receive federal funding for affordable housing. Now they're all on notice that they'll have to take these obligations seriously.