Opponents of a policy that sets aside affordable housing for people living in the neighborhood where the apartments are being built took a sledgehammer to its size and scope as part of a major settlement in a federal case this week.

Attorneys for the plaintiffs argued that the policy — known as community preference — entrenched racial residential segregation in the city, limiting opportunities for some Black and Latino New Yorkers to move to neighborhoods with good schools, low crime and well-maintained parks.

Councilwoman Gale Brewer of the Upper West Side said she spoke to developers recently who explained the demand for these units.

One building had 70,000 applicants, she said.

“So when you have 70,000 applicants, and you’re coming from East New York [in Brooklyn], you don’t necessarily get the opportunity to move out of your neighborhood to Manhattan,” Brewer said.

Filed in 2015, de Blasio administration officials fought the suit, defending community preference as a way to get City Councilmembers to support large housing projects in their districts and prevent displacement.

That is something NYC Housing Connect — the website where New Yorkers can apply for these lotteries — promotes.

One testimonial from a Bronx mom it sites reads: “This apartment let me stay in my neighborhood.”

“When there is [a] controversial project in a neighborhood, one thing that you can say is that it is an opportunity for the neighborhood to get a placement in that building,” Brewer said.

Under the settlement, no more than 20% of affordable housing units offered by lottery will be set aside for people based on an application.

That will be in effect through April 2029. Then afterward, the number of units set aside decreases to 15%.

“It is lower, but what it does is, it preserves that tool and allows us to continue to do our work,” Deputy Mayor Maria Torres-Springer said on "News All Day" Friday.

Craig Gurian, the lead plaintiff’s attorney, said earlier in the week: “For the first time, we are moving away from the idea of racial turf.”

Moses Gates, a housing expert with the Regional Plan Association, thought development would continue, saying that planning has moved away from neighborhood-by-neighborhood strategy to one that focuses on the city as a whole.

“I wouldn’t be surprised to see the projects keep moving and the affordable housing development keep coming on,” he said.

The plaintiffs in this case are two Black women who entered lotteries for a chance to move into an apartment in neighborhoods from the Upper West Side down to lower Manhattan.

As part of the settlement, the city will pay them $100,000 each.