Boat owners on the Driffield Navigation waterway in East Yorkshire are fighting council plans to move them on.
Officials said the houseboats at Bethells Bridge at Hempholme amounted to "new dwellings" and were, therefore, in breach of planning guidelines.
The owners of two boats have appealed against council enforcement notices and there will now be a public inquiry.
Gordon Taylor said he did not think he needed planning consent as his boat was not permanently moored at the site.
Mr Taylor, who lives with his wife Eileen on the Mary Grace, said: "We've been paying our council tax since we've had a boat.
"This is our second boat, we've had boats there for about 15 years now.
"We didn't think we had to have planning permission for the boat. We've appealed against it because the mooring belongs to the Bethells Bridge Boat Club.
"If we were permanently moored they'd have a case against us but we're not permanently moored.
"We do abide by the regulations but for some reason they still want to move us off the system and, in my opinion, they are not allowed to because we have the right to navigate."
The couple have lodged an appeal against the council's decision to the planning inspectorate.
Chris Anderson, a spokesman for the Bethells Bridge Boat Club where the houseboats are berthed, said: "If they do end up moving off all it's going to do is put a burden on society because they will have to get rid of their houses and probably lose their jobs because they're moving away.
"They'll end up living in a council house claiming off society itself."
East Riding of Yorkshire Council said in a statement: "The people concerned are living in boats on the canal which requires planning consent.
"The council has a policy objection to what is effectively a new dwelling in the countryside and is not likely to give consent for this change of use."