The Department of Housing and Urban Development is requiring a tiny Methodist-affiliated Michigan town to show documentation of their exemption from the federal Fair Housing Act after a nearby inclusiveness group sued them for barring non-Christians from living within their limits.

Hemant Mehta at Patheos’ The Friendly Atheist reported that the town of Bay View, Michigan once required all its residents to be both white and Christian, and although they dropped race from their charter in the 1950’s, they continue to only allow Christians to live there.

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In 2017, Mehta wrote, the Bay View Chautauqua Inclusiveness Group sued the privately-owned Bay View Association of the United Methodist Church for alleged violations of the constitution’s religious freedom clause, the Fair Housing Act, Michigan’s state constitution and other civil rights laws.

“They argued that Bay View isn’t affiliated in any meaningful way with the UMC,” the report continued. “They operate independently from it and they’re owned by a for-profit company. They also pay taxes, an admission they’re not a church property. And they maintain and use ‘State-delegated police power.'”

Earlier this week, HUD announced the Bay View Association “has not met its burden to prove it is exempt from the federal Fair Housing Act.” In short, Mehta wrote, the federal housing authority doesn’t believe the town that boasted a population of 133 in the 2010 Census is actually a private religious organization.