New York will now stop sending homeless families to Newark while the two sides continue talking.
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Some New Jersey cities had complained about the poor conditions in which these families were living.
Thousands of homeless working families who had been in the shelter system were offered a year of rent if they agreed to leave the five boroughs.
After first keeping it a secret, Mayor Bill de Blasio says he's ready to talk.
"Certainly we want to have a dialogue with anyone, New Jersey or any place else that wants to talk this through about how we can work together on a regional solution," he said. "This is a regional problem."
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Newark Mayor Ras Baraka said it's about safety,
"For us, this was always about making sure these people were in safe and sanitary housing, and they were handled in a dignified manner," he said. "Not just jettisoned here with no safety nets."
After the lawsuit was filed,de Blasio accused Newark of "demonizing the poor."
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