SLAUGHTER BEACH, Del. — Sixteen nautical miles from the Indian River Inlet and about 80 feet underwater, a building boom is under way at the Red Bird Reef.

One by one, a machine operator has been shoving hundreds of retired New York City subway cars off a barge, continuing the transformation of a barren stretch of ocean floor into a bountiful oasis, carpeted in sea grasses, walled thick with blue mussels and sponges, and teeming with black sea bass and tautog.

“They’re basically luxury condominiums for fish,” Jeff Tinsman, artificial reef program manager for the Delaware Department of Natural Resources and Environmental Control, said as one of 48 of the 19-ton retirees from New York City sank toward the 666 already on the ocean floor.

But now, Delaware is struggling with the misfortune of its own success.

Having planted a thriving community in what was once an underwater desert, state marine officials are faced with the sort of overcrowding, crime and traffic problems more common to terrestrial cities.

The summer flounder and bass have snuggled so tightly on top and in the nooks of the subway cars that Mr. Tinsman is trying to expand the housing capacity. He is having trouble, however, because other states, seeing Delaware’s successes, have started competing for the subway cars, which New York City provides free.

Crisscrossing over the reef, commercial pot fishermen keep getting their lines tangled with those of smaller hook-and-reel anglers, and the rising tension has led the state to ask federal marine officials to declare the area off limits to large commercial fishermen.

As the reef has become more popular, theft and sabotage of fishing traps and pots has more than doubled in the last several years, said Capt. David Lewis of the Delaware Bay Launch Service. “People now don’t just steal the fish inside the pots out here, they’ve started stealing the pots, too,” he said.

The reef, named after New York City’s famous Redbird subway cars, now supports more than 10,000 angler trips annually, up from fewer than 300 in 1997. It has seen a 400-fold increase in the amount of marine food per square foot in the last seven years, according to state data.

Mr. Tinsman said his department was doing everything it could to expand the capacity, noting that last year, when subway cars were unavailable, he sank a 92-year-old tugboat and the YOG-93, a 175-foot decommissioned Navy tanker built in 1945 for the planned invasion of Japan. Fifty subway cars are due this month, he said.

“The secret is out, I guess,” said Michael G. Zacchea, the Metropolitan Transportation Authority official in charge of getting rid of New York City’s old subway cars.

Mr. Zacchea added that Delaware’s prospects for expanding the reef looked grim because New York State has said it wanted all of the city’s retired subway cars once the United States Army Corps of Engineers updates the state’s reef permit this summer. Mr. Zacchea said he would soon stop shipments out of state, saving perhaps $2 million in transport costs. As a good faith gesture, the city probably will provide about 100 cars to Delaware, Maryland, Virginia and New Jersey before out-of-state deliveries are halted.

While New York State works to get its permit in place, other states are pushing hard to get what they can from the city, Mr. Zacchea said.

Last month, for example, New Jersey, which stopped taking the cars in 2003 because of environmental concerns, asked the city for 600 of them.

Tim Dillingham, the executive director of the American Littoral Society, a coastal conservation group based in Sandy Hook, N.J., said natural rock and concrete balls were far safer and more durable materials for artificial reefs.

“Those materials also cost more, and we’re sensitive to the realities of budget crunches in many states,” Mr. Dillingham said.

The American Littoral Society and other environmental groups opposed the use of the Redbird cars because they have small levels of asbestos in the glue used to secure the floor panels and in the insulation material in the walls.

State and federal environmental officials approved the use of the Redbirds and other cars for artificial reefs in Delaware and elsewhere because they said the asbestos was not a risk for marine life and has to be airborne to pose a threat to humans.

Mr. Dillingham said his group had pushed New Jersey to use only New York City’s cars, which have only stainless steel on the outside, contain less asbestos and are more durable. Delaware, which oversees nine artificial reef sites in state waters and five, including Red Bird Reef, in federal waters, was the first state to get subway cars from New York City, in August 2001.

In the last several years, the reefs have drawn swift open-ocean fish, like tuna and mackerel, that use the reefs as hunting grounds for smaller prey. Sea bass like to live inside the cars, while large flounder lie in the silt that settles on top of the cars, said Mr. Tinsman, the Delaware official.

States have experimented with other types of artificial reef materials, including abandoned automobiles, tanks, refrigerators, shopping carts and washing machines.

Mr. Tinsman particularly favors the newer subway cars with stainless steel on the outside to create reefs. “We call these the DeLoreans of the deep,” he said.

Subway cars in general, he said, are roomy enough to invite certain fish, too heavy to shift easily in storms and durable enough to avoid throwing off debris for decades.

“The one problem I see with them,” Mr. Tinsman said, “is that just like the DeLoreans, there are only a limited number.”

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