“I probably have the record for having the longest subdivision approval process in the State of New York,” Mr. Fried said.

But as the town slow-walked the approvals, the demographics in Orange County changed. A small community of Satmar Hasidim, who speak Yiddish and practice a form of charismatic Judaism that tries to limit modern influences, arrived in the area in the 1970s, seeking a peaceful place to raise their children away from increasingly crowded Brooklyn.

Their numbers grew steadily, in part , because of their typically large families. Kiryas Joel, a section of the Town of Monroe where they settled, now has 24,000 people and became its own town, Palm Tree, in January. Offshoot communities have been formed nearby in Blooming Grove, among other places in the county.

In 2017, Mr. Fried sold the lot in Chester with its court-won approvals for $12 million to the current developers. The city then granted permits to clear the land and build roads. But once town residents learned in 2018 that the new owners were Hasidic, town meetings were called and things came to a grinding halt, the lawsuit charges.

School costs are one major concern, residents said at town meetings. While Hasidic Jews typically attend their own religious schools, local districts in New York have to pay for a percentage of their busing costs and special education services.

The Chester school district, in a Q. and A., projected the development could raise school taxes in the town by between $92 and $524 per household, using an estimate that between 1,720 and 2,580 students would live at the Greens at Chester.

Last year, the Chester school district had a total of 993 students, according to state data.

There are also political concerns. Hasidic Jews tend to vote in blocs, increasing their political leverage. The arrival of hundreds of new voters in a town of 12,000 has the possibility to remake the political balance in Chester, as it has in other towns, Mr. Jamieson said. The town recently voted to switch to a ward system of representation in preparation for a major demographic shift.