Propelled by gusts from Sandy, one of the biggest storms to hit the United States, the blaze destroyed dozens of houses in Queens.
Firefighters struggled through floodwater, some using boats, to reach and control the blaze.
The Breezy Point neighbourhood was ordered evacuated as Sandy approached and there were no immediate reports of casualties, though local media said a number of people had to be rescued.
In another area of the city, hundreds of patients were evacuated from New York University's medical center when its backup generator failed amid widespread power outages.
After wreaking havoc in the Caribbean, Sandy dropped below hurricane status before making landfall in New Jersey Monday.
But the storm is still causing extensive damage on the East Coast.
At least 13 have been reported killed and 7 million homes and business have been hit by the power outages.
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