The two-family building on 65th Place in Woodside had been illegally converted into a five-family home, which fire officials say may have obscured the victims' escape routes. Four of the seven illegally-rented rooms were in the basement, where tenants shared a bathroom and kitchen.
Fire Department officials said flames broke out in one of the basement rooms around 2:45 a.m., when a boiler exploded.
Two people died in the house and one died at Elmhurst Hospital, according to fire officials.
Four others were taken to Woodhull Burn Center, but as of late Saturday their injuries and conditions were unknown.
Fire officials also said the city Department of Buildings issued three violations at the site: illegal occupancy, lack of exits and work being done without a permit.
The owner of the home, who was injured in the fire, was fined $15,000 and as of late Saturday was possibly facing criminal charges.
Tenants in the neighboring home have also been forced to vacate because of similar illegal conversions.
"I had no idea that it was illegal occupancy. Welfare inspectors came, inspected it, they said it was okay. They even paid my rent," said a resident. "So now all of a sudden they're saying I have to leave today. I don't know if the fire put the spotlight on this."
"A lot of people have no job, nothing, so a lot people rent houses, rent the new rooms as apartments, have people to live in there," said neighbor Mohammad Hannan. "The landlord does it room by room. It wasn't common before but it's getting like that."
Meanwhile, the fire raised concerns over the city's 911 dispatch system. Firefighters said they lost precious response time when they were mistakenly sent to the wrong address, three blocks away from the blaze. "Had we been on the time, we can't swear we would have saved all lives, however, we didn't have the opportunity to," said Leroy McGinnis of the Uniformed Firefighters Association. "A couple minutes or more was lost in time, which allowed this fire to create more heat, more smoke, which unfortunately may have led to the death of three people."
FDNY officials said one unit was delayed about 40 seconds.
Under the new Unified Call Taker system, 911 operators dispatch firefighters directly instead of first transferring calls to the Fire Department.
The Uniformed Firefighters Association said errors are common with the new call system and even small delays can cost lives.