That is not even remotely close to the situation as you described it. Not even in the same ballpark.
A private group sued the county after they "collected $52 million in federal development grants by falsely certifying in the grant paperwork that it had analyzed impediments to fair housing."
There was a federal development grant that required the county to conduct an assessment of it's zoning policies to determine whether those zoning policies prevented developers from building affordable housing. Many counties have policies like that--minimum square footage, minimum acreage etc...
The county lied, said they had conducted this analysis, and collected $52 million. As punishment they were forced to pay back some of the money, and issue permits for 750 affordable homes. Not housing projects. The federal government didn't build any homes, they didn't bus anyone in from 80 miles away.
And the primary motivating force for this settlement were local advocacy groups who were arguing against overly restrictive zoning by local government. In fact this entire situation is an example of government overreach in exactly the opposite direction. The local government created a problem, and the Federal government stepped in to provide redress to local petitioners.