Sixteen shocked families in a Lower East Side tenement suddenly found themselves homeless last Wednesday morning when a backhoe breaking ground on a New York City Housing Partnership’s New Homes lot apparently damaged their building’s foundation.

The cracks were severe enough to cause city officials to evacuate residents and two businesses from 182 Avenue B–and halt construction at four other nearby New Homes sites worked on by BFC Construction, the Partnership’s contractor.

“The wall facing the construction site has cracks throughout,” said spokesperson Ted Birkhahn of the Department of Buildings, which issued a violation against the company for work at the Ave. B site. “The main problem is on the first floor wall, which is bulging out three to four inches and is extremely unstable and will most likely have to be replaced.”

An engineer with Manhattan Borough President Virginia Fields’ office examined the sites Wednesday afternoon and found that at least two buildings abutting other New Homes projects in the neighborhood showed similar signs of distress. “One had similar rubble around the foundation and loose mortar,” he said. “On the other, you could visibly see loose bricks on the lower part of the wall.”

“One tenant brought us into the basement, and I got scared as hell,” added community activist Armando Perez, who also toured the damaged buildings. “We saw sunlight coming through cracks in the walls where they were digging next door.”

According to Patrick Gaspard, chief of staff for local Councilwoman Margarita Lopez, city officials were similarly appalled by what they saw. When Office of Emergency Management Director Jerome Hauer eyeballed the other sites, he immediately halted construction, Gaspard said. The buildings department confirmed that a stop work order has been issued for the two sites where construction had begun.

In a statement faxed to City Limits, BFC attributed the accident to “prior structural distress,” and took credit for saving the Ave. B tenement. “If not for the swift action of BFC….this building may very well have collapsed,” wrote company spokesman Stephen Mangione. “[We] averted disaster and saved the homes of 16 families.”

The refugees from 182 Avenue B are now living with friends, relatives or at SRO rooms provided by the Red Cross, while they wait to find out when they will be able to move back. According to Burkhahn, the building will not need to be demolished and residents may be able to move back a week or so he said. “[BFC] is doing the shoring up of the wall and will most likely handle the replacement,” he said.

A Partnership spokesman said his organization was monitoring the situation.