The Obama administration announced new rules on Wednesday that are meant to racially integrate America's neighborhoods but some conservatives claim are an attempt by Washington to play a heavy-handed role in creating “utopias.”

The new HUD housing rule comes on the heels of a landmark Supreme Court decision that reaffirmed the federal agency’s power to ban housing policies that hurt minorities.

The Fair Housing Act, which originally was passed in 1968 and barred racial discrimination, demanded the government end segregation.

The new rule takes this a step further and requires cities across the country to scrutinize their housing patterns for racial bias and report the results every three to five years. Communities would also have to set and track goals to further reduce segregation.

“Unfortunately, too many Americans find their dreams limited by where they come from, and a ZIP code should never determine a child’s future,” Julian Castro, the secretary of the department of Housing and Urban Development, said Wednesday in a written statement. “This important step will give local leaders the tools they need to provide all Americans with access to safe, affordable housing in communities that are rich with opportunity.”

But others say the rule is nothing short of a government power grab.

“This overreaching new regulation is an attempt to extort communities into giving up control of local zoning decisions and reengineer the makeup of our neighborhoods,” Rep. Paul Gosar, R-Ariz., told FoxNews.com in a written statement on Wednesday.

“Just as the president has used the DOJ, IRS and DHS as a political weapon, he has now expanded his arsenal to include HUD as a way of punishing neighborhoods that don’t fall in line with his liberal agenda," he added.

In June, Gosar said the HUD rule attempts to tell Americans “how we can live, where we go to school, how we will vote” and “what this utopian type of neighborhood should look like.”

Gosar believes the proposal will have far-reaching consequences that only boosts the federal government’s power over where homes can be built and who can live in them. He adds that if cheaper homes start to crop up on the outskirts of wealthier properties, it could potentially depress property values.

Gosar sponsored an amendment to the House HUD spending bill – which passed -- that would block any future funding for the new rules.

“This rule is not about racial integration; racial segregation in housing is illegal and has been for decades,” Heritage Foundation fellow Hans von Spakovsky told FoxNews.com. “Americans have the ability to live anywhere they want. This is about left-wing, progressive social urban planners who have taken control through the Obama administration who hate suburbs and don’t like Americans using cars or owning single family homes in neighborhoods that are not high-density.”

Von Spakovsky believes the rule will make things worse for the poor.

“They are using federal housing money intended to improve the bad housing of poor Americans as the lever to force compliance with these new regulations,” he said. “But that money is most needed in blighted, inner city urban neighborhoods, where there are a large number of African Americans. This federal utopian vision will divert that needed federal money into suburbs where it is not needed, leaving poor Americans living in substandard, terrible housing.”

Last month, Castro defended the new rule to skeptical lawmakers on Capitol Hill.

“It’s not just about affordable housing -- It’s about good transit. It’s about access to good schools; it’s about all that,” he said at the time.

Rep. Mia Love, R-Utah, pressed Castro during the Housing and Urban Development Department Oversight Hearing, for examples where the federal government has been able to successfully diversify areas or end discrimination.

“I know that, as mayor, you wouldn’t want the federal government coming in to tell you what to do with your zoning laws or with your rules, because you have more skin in the game; you have more of an incentive to take care of the people that live in your areas,” Love told Castro, who served as mayor of San Antonio, between 2009 and 2014.