Newark Mayor Ras Baraka has been a progressive ally of Mayor de Blasio but it seems their relationship has soured. Earlier this week, Baraka filed a federal lawsuit over an assistance program that's placed more than a thousand homeless New Yorkers in rentals in Newark. Thursday, de Blasio hit back.

"That was really a derogatory lawsuit,” de Blasio said. “It was a statement against working poor people."

At issue is a city program known as Special One-Time Assistance. Its goal is to take homeless New Yorkers who have income out of homeless shelters and into stable housing, with the city paying a year's rent. But the majority of New Yorkers in the program are placed outside the city, and Newark doesn't want them, arguing it's an undue burden.

"I literally think this is an American values questions and an American law question. You cannot tell a human being they are not allowed to live in your city simply because they are poor,” de Blasio said. “I find this extraordinary that they decide to sue the City of New York to stop working poor people from housing, from getting housing in the middle of the holiday season."

Meanwhile, the city's Department of Investigation (DOI) looked into complaints that some residents in the program were living in squalid conditions, but instead found more systemic issues.

"This was a problem with the program and not just with this one bad landlord," said Margaret Garnett, the Commissioner of DOI.

The agency's report found poor training and oversight, and an inability to hold bad landlords accountable, in part because the first year's rent was paid entirely up front.

"They had the money in their pocket, and there were limited mechanisms for the city to get that money back," Garnett said.

City officials are implementing the report's recommendations.

"There were mistakes for sure and those mistakes were caught and acted on," said Mayor de Blasio.

De Blasio said he was surprised and confused by Newark's lawsuit given he and Mayor Baraka had been in active discussions over the issue.

"I'm just profoundly disappointed that that's what he chose to do," said de Blasio.

A spokeswoman for Mayor Baraka declined comment.