The cave home of Todor Velikov is a room with no view, but it does have the advantage of zero rent and historical pedigree.

Velikov is a Bulgarian migrant laborer who, along with thousands of other clandestine arrivals to Rome, has taken up residence among the nooks and crannies of an ancient city filled with out-of-the-way hideouts. The newcomers inhabit abandoned houses, construction sites, parks, the undersides of bridges, Roman ruins and, in Velikov's case, a hole on a hillside -- actually, a 2nd-century grotto that once sheltered images of Roman gods.

Once a stopover on the way to wealthier northern nations, Italy is becoming a permanent destination. It formerly resisted accepting foreigners but is now emerging as a welcoming host. Under laws issued by the government of Prime Minister Silvio Berlusconi, the number of residency permits granted last year exploded to 630,000, almost triple that of the year before, according to Interior Ministry statistics.

The government decided that regularizing the status of immigrants helped fulfill the needs of businesses that employed them, mainly in menial tasks. The program was supposed to be accompanied by a crackdown on illegal residents, but few have been deported.

Besides serving as an example of the destitution of many migrants, Velikov's cave house, set among about 20 other such hidden grottoes north of central Rome, highlights the latest trend in arrivals: a boom in East Europeans coming from beyond the newly expanded European Union.

Newcomers from such countries as Romania, Ukraine, Moldova and Bulgaria are beginning to statistically muscle out migrants from as far afield as Morocco, the Philippines, Tunisia and China, according to data gathered by the Catholic relief agency Caritas.

"Italy is really experiencing an Eastern European phenomenon," said Lequyin Ngodhin, a Caritas official in Rome. "The situation in the East is gravely deteriorating. Countries like Romania, Bulgaria and Ukraine are far from joining the European Union. Their people aren't waiting. They're coming here to join first."

The length of Italy's coastline and relatively light internal controls make pinning down the immigrant population guesswork. However, Italy also has been issuing legalization papers in increasing numbers, and observers note that the numbers of East European applicants for residence are rising faster than those of any other group.

Requests from Romanians and Bulgarians doubled over the past year, according to the Interior Ministry, which handles immigrant affairs. Those from citizens of Ukraine multiplied by eight; the number of applicants from Moldova multiplied by five.

Romanians now represent the largest single number of legal aliens in Italy. They're here as extracommunitari, meaning residents from outside the E.U., and they make up 10 percent of Italy's 2.5 million legal immigrants.

The East European accent is notable in the cave suburb where Velikov and a fellow Bulgarian, Pyotor Desislav, live, just below the stylish Parioli neighborhood. Except for the presence of a few native homeless people, most of about 20 grottoes are inhabited by citizens of former Communist bloc countries. "We have a little Warsaw Pact here," said Desislav, referring to the defunct Soviet military alliance. "We all get along. We're just trying to save money."

Velikov, an elevator repairman who has lived in Italy for six years, said he chose the cave over rental housing because of its convenience. "There are lots of stores nearby where I do my shopping," he said.

He said he sometimes considers going back to Bulgaria, but then thinks, "Why should I leave? Look where I live. This is a good place." He has lived in the cave for 18 months, after wandering from temporary home to temporary home.

Desislav's cave was decorated with a Daffy Duck movie poster, a billboard for a Roman bookstore, wall-to-wall carpeting and dried flowers. There was a place to shower in one corner, a fireplace in another. A natural skylight illuminated a small table scavenged from a junkyard. Desislav is a construction worker who has lived in Rome off and on for nine years. He suffered a heart attack recently and is being treated at a Rome hospital. "I can't go back to Bulgaria now," he said. "I would die there. But I can only do light odd jobs now. I'm too weak."

He received a visitor from Moldova, a Russian speaker who joined the cave community recently. "My country is so poor," said the Moldovan, Gregor Artemev, a mechanic. "The only way to make real money is to come here. Rome is an expensive city. If I pay rent, I will make nothing."

Migration is changing the face of once-homogenous Italian cities. Africans, Arabs, Slavs, Albanians, Filipinos and Chinese jostle one another on streets full of clothing vendors, fruit and vegetable salespeople, souvenir hawkers, prostitutes and their pimps. Restaurant kitchens once peopled only by Italians now employ Bangladeshi cooks and Ecuadoran busboys.

Migrant ghettoes have sprung up all over. Some are made up exclusively of single ethnic groups. African workers, for instance, dominate the fruit orchards north of Naples. The Chinese populate large communities near Florence, where they produce leather goods, and others in Rome, where they have set up wholesale clothing outlets similar to those once operated by Jewish peddlers.

Many of the communities are mixed, however. Near Rome's main Termini train station, Africans, South Asians and East Europeans inhabit rundown apartments if they can afford rent -- or abandoned tenements, basements and outdoor camps that spring up by night in public parks if they can't.

"It's warm here," said Daniel, a 22-year-old Romanian computer school graduate who came to Rome in May looking for work. "You can imagine, if you are from the Ukraine, sleeping out in Rome is almost a pleasure."

Daniel and his friend Christian, both from Bucharest, the capital, said they had had little luck finding jobs. Neither has a residency permit. They bunk at the apartments of other Romanian immigrants, and when those places are full, they camp at the edge of the Appian Way archaeological park among the remains of an imperial aqueduct.

They sometimes turn to prostitution to make ends meet. "If we were at home, we'd be embarrassed. But we're sending money back, and no one asks questions," Daniel said as he, Christian and a Filipino transvestite departed for a night at the Re di Roma bingo parlor. Their sex-for-hire earnings of about $50 a night equals what they figure they would earn in a month in Romania.

Caritas data indicate that Romanian immigrants are relatively well-educated, but that Italy, which has lagged in the Internet-driven high-tech boom, has few jobs to offer them. "They would be far better off in the United States," said Franco Pitani, a Caritas program coordinator. "But they can get here easier, even if times are harder here."

The spread of migrants around the city has upset some Romans. The city depends a great deal on tourism and pilgrimage, and the wave of male and female prostitutes near the Termini Station and the campers under Tiber River bridges and at the grottoes interferes with Rome's postcard imagery.

Writing in the newspaper Corriere della Sera, columnist Giuseppe Pullara noted the contrast between the Parioli neighborhood and the caves beneath it: "On the surface, a rich and happy population . . . and below, meandering under earth, the blind unhappiness of a people without hope, tied to hard labor at the service of those living above."

City hall is trying to find a way to empty and seal the Parioli caves. Officials say they hope to provide rent assistance to the inhabitants, then seal the grottoes when the squatters move out.

Antonio Saccone, an adviser to Rome's mayor, Walter Veltroni, noted that police recently cleared an improvised campground at a park in the Colle Oppio district where hundreds of migrants spent the night. "There's a sanitation problem; there are dangers from fires and crime," he said. "The problem is these people don't want to move. It's not that no housing exists. They would rather camp out or live in a doorway than pay. It's a social and economic problem. We can't have people living like this in 2004."

Velikov, the Bulgarian, disagrees. "If they send us away, others will just come and take our place," he said. "Excuse me, but I worked hard to make this place what it is. I civilized this place. When I first came here, there were snakes and mice. It was the Stone Age."

Special correspondent Stacy Meichtry contributed to this report.

Todor Velikov, a migrant laborer from Bulgaria, is one of many foreigners making a home out of Rome's out-of-the-way hideouts.Todor Velikov stands outside his home, a cave in the Parioli district of Rome. He has lived in the cave for 18 months, after wandering from place to place.