The fire at Breezy Point in Queens was fought by 190 firefighter but floored more than 50 homes. One firefighter told the BBC how they rescued 25 people with a boat.
Lower Manhatten is under water and 670,000 New York homes have been left without power as the former hurricane causes widespread flooring, power cuts and fires.
The storm which has battered the east coast is now moving west (inland), forecasters say, toward the Great Lakes area.
The weakening storm is believed to still bring 50kmh winds, heavy rain and flooding to the inland.
A New Jersey nuclear power plant has been shut down due to problems with their water pumps, but is said to be stable.
New York University hospital has relocated patients to other facilities after losing power.
While it is gradually weakening, gusts of up 50mph are expected, and heavy rainfall will bring flooding to inland areas.
The New York Stock Exchange (NYSE) and the Nasdaq has ceased trading for the first time for a weather incident since 1985’s Hurricane Gloria.
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