From the Gotham Gazette:
Illegal units have been around since the 1940s when owners opened their doors to returning World War II veterans. But the homes first got negative public attention in the 1990s after a series of fires occurred in Queens.
Today, most of the illegal residences are one and two family homes whose owners have reconstructed cellars and basements to rent out. Cellars, which have more than half of their height below curb level, cannot be legal apartments under city regulations. Owners also carve out illegal single-room occupancy residences by partitioning bedrooms on upper floors.
This "housing underground," as Chhaya Community Development Corp., a nonprofit housing advocacy and economic development and justice organization, calls it, has mushroomed in predominantly middle-class residential neighborhoods of Queens. These neighborhoods attract immigrants seeking a new start. Many feel fairly comfortable because they already house people from their home countries.
Property owners created more than 114,000 illegal so-called "accessory dwellings" between 1990 and 2000, accounting for about 50 percent of apartments produced in the city during that period. In Queens roughly 48,000 illegal units were built, representing 73 percent of all housing constructed in the borough during that decade, according to the Pratt Center for Community Development, a university based advocacy, planning, the actual number of such residences is almost certainly higher.
While the divided houses often violate fire and other safety ordinances and zoning regulations, they offer many New Yorkers their only source of affordable housing. The city has an apartment vacancy rate of less than 3 percent, according to the latest Housing and Vacancy Survey. Under state law, anything below 5 per cent constitutes a housing emergency.
In addition to recent immigrants, the divided buildings house college students and provide a lifeline for low-income people as well as New Yorkers hard-hit by the recession.
The foreclosure crisis has spurred more of these divided homes. The illegal apartments provide steady rental income to homeowners who cannot otherwise meet their mortgage payments.