YOKOSUKA NAVAL BASE, Japan — Zushi city officials won’t appeal the recent court decision dismissing their claim that the Japanese government broke its promise not to build more housing in the U.S. Navy’s Ikego Housing Area.

Mayor Ryuichi Hirai announced the decision Wednesday after the city assembly rejected appropriating the necessary legal fees, a city military facilities division official said Friday. The city cannot afford to appeal the case to the Supreme Court, the official said.

City officials filed the lawsuit two years ago after the Navy and the Japanese government announced the Aomori Hills project — a plan to build 700 more housing units in Ikego.

The added housing will eventually replace the Navy’s Negishi Family Housing Area, which is scheduled to be handed back to Japan in the next 10 years, said Commander Naval Forces Japan spokesman Jon Nylander.

Aomori Hills is projected for completion in 2015, Nylander said.

According to Zushi City, IT, Kanagawa prefecture and the Japanese government agreed to limit Ikego construction in 1994, due to the area’s rare old-growth forests.

The Tokyo high court dismissed Zushi’s claim on Feb. 15, saying the agreement was “non-binding” and that the issue does not belong in court.

But the city’s position remains unchanged and they will continue to talk with the national government, the official said.