Janice and Herman Minta thought they had the solution to their economic hardship after Herman became unemployed in 2007: rent out the first floor of their home and the basement, too. Then trouble moved in: a city inspector showed up on their doorstop, forcing the Mintas to boot the illegal basement tenant and lose that income.

That led to missed mortgage payments, and since February, they haven’t paid at all. Now the Mintas, who were first-time buyers when they moved to their two-family house in 2007, are considering seeking a loan modification to lower their payments so they can stay in their Springfield Gardens home.

As the national unemployment rate surpassed 10 percent in October – the highest in 26 years – and the foreclosure crisis continues to hammer Queens homeowners, the problem of illegally converted housing like the Mintas' is increasing in scope and severity. The Department of Buildings reports that complaints of illegally converted dwellings in New York City have jumped 62 percent during the past three years – despite new laws that increase penalties to as much as $25,000 and a year in jail. The effects that foreclosure and unemployment have had on Queens residents, according to housing advocates and government officials, are reason to worry about the deteriorating housing situation across the borough.

“The recession definitely has impacted the housing situation in Queens – no question it has led to an increased number of illegal dwellings,” said Dan Andrews, press officer for Queens Borough President Helen Marshall. “We are now seeing a resurgence of illegal units as people are losing their homes or trying to stay in the ones they own by renting out a basement.”

The neighborhoods with the highest percentage of such conversions, Andrews said, include Flushing, Jackson Heights, Elmhurst, Corona and Jamaica.

Andrews said there is no way to know how many illegal apartments exist in Queens because they are discovered only through a complaint-driven process. That's what exposed the Mintas - a complaint from their first floor tenant to the city’s 3-1-1 citizen hotline. Andrews said the borough president's office, the Queens district attorney’s office, and law enforcement officials know that illegal dwellings are a borough-wide problem. The Queens Illegal Apartment Conversion Task Force was established in the early 1990s to confront this growing issue. Consisting of the Department of Buildings, municipal agencies and civic organizations, the group was phased out in the late 1990s, but it was recently resurrected due to increased complaints.

The New York City Department of Housing defines an illegal conversion as “the creation of one or more additional dwelling units within a home without first receiving the approval of, and permits from, the New York City Department of Buildings.” The Mintas transformed their basement into a livable environment for a single occupant without getting the proper permit and certificate of occupancy.

The Furman Center for Real Estate and Urban Policy found conditions ripe in Queens, which makes up 28 percent of the city’s total population, but accounted for 41 percent of all foreclosure filings in New York City from 2007 through June 2009, making it the highest rate across all five boroughs. Homeowners on the verge of foreclosure have been looking for ways to keep up with their mortgages. Many are renting out basements and attics or subdividing rooms. The Mintas, living on a single salary, said they relied heavily on such rental income - especially as the interest rate on their adjustable rate mortgage ballooned, rising from 6.5 to nearly 10 percent.

But, while these conversions provide needed income for the owners and a cheaper accommodation for the renter, it poses dangers that are sometimes deadly.

At 2:45 on the morning of Nov. 7, a fire broke out in an illegally converted Woodside home, killing three Bangladeshi immigrants and leaving four injured. The Department of Buildings found that the owner illegally divided the house into seven single occupancy rooms, with tenants sharing kitchens and bathrooms. Four men were living in single occupancy rooms in a basement near an exposed boiler, with no fire alarms or exits. Fire officials said they believe the boiler caused the fire.

Andrews said such incidents illustrate the need for the task force. The illegal conversions group isn't looking to throw people out on the street and increase the homeless population, he said, but preventing tragedies is the primary goal.

“You have a house wired for six or fewer people but actually has a great number of individuals cooking in basement rooms, using hot plates and microwaves; this creates all sorts of fire issues,” he said. “Unfortunately the need for heat appliances is coming soon with winter, and this adds to the crisis.”

But these factors have not prevented illegal apartments from multiplying. A 2008 study by two housing advocacy groups, the Pratt Center for Community Development and Chhaya Community Development Corp., said that that there are roughly 114,000 “unaccounted for” housing units across the city, making up roughly 4 percent of the city’s housing stock. The estimate was derived by comparing U.S. Census data and records from the Department of Buildings. The report approximates that Queens alone accounts for 48,000 illegal units.

“If every illegal apartment in Queens was removed, we’d have a housing shortage,” said Janine Kuzniewski, a senior court attorney with the Queens Civil Court. She and others who work with homeowners facing violations indicate that sometimes, real estate agents sell it as a way for people to make their mortgages.

Aaron Choi, who works for a Flushing-based agency called Ticket Busters and provides representation for violation recipients, agreed that potential buyers are frequently mislead or not informed of illegal conditions within a home at the time of purchase. He said some agents tell buyers, "you can rent out the basement because it is fully finished" when in fact the spaces don’t meet the appropriate housing codes for occupancy. Getting the right information can be elusive, especially for first time home buyers. Andrews agrees.

Aside from the fire risk that illegal conversions pose, a neighborhood's quality of life is affected as unplanned growth leads to school overcrowding, sanitation problems and reduced parking availability -- creating an overall strain on municipal services, said Andrews.

Converted spaces are especially prevalent within immigrant communities. With 46 percent of its residents foreign-born, Queens is the nation’s most diverse county. The New York Immigrant Coalition recently surveyed 541 foreign-born residents living in immigrant-heavy neighborhoods and found that 48 percent of respondents knew of immigrants who were living in illegal apartments such as attics, garages or basements.

Andrews said that affordability in New York is the biggest cause for illegal units. “Despite the effort to build affordable housing in New York, there isn’t enough – there’s never enough,” he said.

After tragedies such as the recent Woodside fire, there is a renewed urgency to eliminate these types of dwellings. As economically embattled residents continue to look for affordable housing, the demand for conversions remains high. At the same time, landlords like the Mintas frantically try to avoid foreclosure. But Andrews knows the solution isn't as easy as a task force. “There’s no magic wand that says, ‘Here’s how you put a padlock on an illegal conversion.’”