The faded factory town of Riverside, N.J., last year, became the first city in the state to enact legislation penalizing anyone who employed or rented to an illegal immigrant. Within months, hundreds, if not thousands, of recent immigrants from Brazil and other Latin American countries fled. After the city started to confront the fees from defending the law against legal challenges, the the town last week rescinded the ordinance.
The New York Times says there is a small but growing list of municipalities nationwide that have begun rethinking such laws as their legal and economic consequences have become clearer. In the past two years, more than 30 towns nationwide have enacted laws intended to address problems attributed to illegal immigration, from overcrowded housing and schools to overextended police forces. A week later, a federal judge struck down ordinances in Hazleton, Pa., the first town to bar illegal immigrants from working or renting homes there. Muzaffar Chishti of the Migration Policy Institute said Riverside's decision to repeal its law – which was never enforced – was influenced by the Hazleton ruling, and he predicted that other towns would follow suit.
Link: http://www.nytimes.com/2007/09/26/nyregion/26riverside.html?_r=1&hp&oref=slogin