The Black Country Plan identified a need to build more than 76,000 homes across Dudley, Walsall and Sandwell by 2039 with more than 7,700 on green belt land.
But it fell apart when Dudley Council’s leader Patrick Harley pulled out of the scheme, stating he was not prepared to sacrifice green belt land to keep others “happy”.
It has left the authorities to draw up their own local housing plans, but it has emerged that the councils have already spent more than £2m on work connected to the scheme.
In 2018, local authorities received a government grant of £570,000 to support preparation of the Black Country Plan.
In addition, Sandwell spent more than £472,000, Walsall Council forked out £424,000, Wolverhampton Council spent £370,000 and Dudley £326,000.
Walsall Council leader Mike Bird said: "We are now looking to recover some of those costs from Dudley Council.
"Although, not all of it has been wasted because some of the data is still relevant."
Councillor Peter Hughes, Sandwell’s cabinet member for regeneration and growth, said so far the council had spent £472,438.78 on work connected with the Black Country Plan but not all of it was abortive costs.
“We will be carrying over some of the work, already completed for the Black Country Plan, into the local plan for Sandwell," he added.
He recently told senior councillors the authority was “exploring options with regards to essential recovery costs incurred as a result of Dudley council’s actions.”
But Dudley Council leader Councillor Harley said the authority had no intention of compensating its neighbours.
The authority will now need to pay out up to £500,000 to develop its own housing proposals.
But he said the additional costs would not be as great as they seemed.
"Around £210,000 would already have been allocated to complete the plan over the next three years," he said.
"As regards other authorities, there is no legal obligation for us to compensate them.
"That data in their reports is still relevant. We've helped contribute to the cost of that."