New York will now stop sending homeless families to Newark while the two sides continue talking.
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."
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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