The front deck of John Chaney's house barge features a 180-degree water view of the Ship Canal, working tug boats and the hulls of giant ships under repair. His neighbors' barges nudge two sides of a marina pier where the only sound late in the afternoon is the gentle slap of waves against the floating homes.

But the peaceful, quintessentially Seattle lifestyle of living on the water is threatened, Chaney and his neighbors say, by changes to the city's shoreline regulations, which could make some floating homes illegal.

"We're part of the rich diversity of Seattle's waterways. But many of us feel that our way of life and our homes are imperiled by the city's proposed rules," said Chaney, vice president of the Lake Union Liveaboard Association.

Seattle is completing the first update since 1987 to its Shoreline Management Program. The proposed legislation is in its third draft and runs more than 300 pages.

It covers all development and uses along the city's waterways, from heavy industrial plants to boat sales to the replacement of piers and pilings. Its overarching goal, say city officials, is that new activity doesn't create a net loss of ecological function.

The City Council plans to get the revisions to the state by the end of the year.

The three pages or so regulating residential uses over water have generated the most controversy, defining the types of liveaboard homes that should be allowed.

Houseboats - floating residences that are permanently moored to docks and are hooked up to the city sewer system - are legal. But new ones would be prohibited under the proposed rules, said Bryan Stevens, spokesman for the city Department of Planning and Development, which is writing the code revisions.

He said the city is running out of undeveloped shoreline and, under state rules, living on the water is not a priority use. State law requires that water-dependent activities such as port facilities, marine-related businesses and recreation be given preference.

Residents of other types of liveaboards - house barges and floating homes not connected to the city's sewer system - say the new rules place them in a legal limbo.

In 1990, the city prohibited new house barges. Thirty-four existing ones were grandfathered in, but they were required to pump their sewage and capture their graywater - the runoff from showers, dishes and washing machines.

The city doesn't regulate boats - and it is legal to live on one - but the boats have to be navigable. Planning Department officials say that no floating home that's legal now will be illegal under the proposal. But liveaboards say the city hasn't enforced the rules for 20 years and homes and barges over the water have proliferated.

The city estimates that as many as 150 current floating residences are illegal. And officials say some people are trying to skirt the restrictions by claiming that structures that look a lot like houses, but float, are actually vessels and so not subject to city regulations.

And some residents have bought barges and paid monthly moorage fees at marinas with the understanding that they were legal residences, only to now find out that they aren't. They aren't capturing their graywater and say that no one else legally living aboard a vessel is required to.

"It's very concerning. When I bought it, nobody said anything," said Anamarie Aliste, an artist who lives up the dock from Chaney at the Nickerson Marina between Fremont and Ballard. Her residence looks a lot like the barges seen on the canals of Europe, but it isn't one of the 34 house barges the city grandfathered in.

Some liveaboard residents are pleased with the city's proposed regulations. They say that without them, marina operators would rent to houseboats and barges, rather than recreational boats, because they could get higher moorage fees and not worry about vacancies.

"We support the right of the city to regulate its waters, and that includes difficult decisions about how to best protect the aquatic environment," said Gail Luhn, president of the Shilshole Liveaboard Association.

She said that about 300 of Shilshole's 1,400 slips are rented to liveaboards. Shilshole has strict regulations that require residents to document their sewage pumping and to protect water quality, something she said the new city regulations would extend to all liveaboards.

The city currently requires marinas to provide toilets, showers and laundry facilities to minimize the discharge of graywater from boats, but Luhn said that some of the illegal house barges and houseboats have dishwashers and washing machines that discharge directly into the lakes and Puget Sound.

City Council members say they're leery of adopting regulations that might wipe out the value of floating homes and barges that were purchased in good faith that they were legal.

But they say they also have a legal duty to protect shoreline uses and water quality.

"I'm a softhearted geek for living on the water. I don't want to do anything that makes those go away," said Council President Sally Clark, after a recent tour of house barges at the Nickerson Marina.

But, she added, "How do we set rules that are fair to the majority while also capturing bad actors who may be dumping their waste?"

Councilmember Richard Conlin, chair of the Planning and Land Use Committee, said the council is trying to strike a balance between giving legal liveaboards security while at the same time making clear that it's not permissible to live on something that's not a boat.

Conlin said some existing house barges and floating homes might meet the definition of a vessel, but some clearly do not.

"We're trying to find a path where people can be reassured they have a legal boat. But people also need to take responsibility when they buy something that it meets the city's codes."

At the Nickerson Marina, Chaney said his house barge likely will be legal under the new regulations. It's got a motor and a steering wheel. It's traveled up and down Puget Sound.

He's asked the City Council to grandfather in existing liveaboards like those at Nickerson Marina. And he's collected more than 800 signatures in support.

Another neighbor, Pat Aylward, said that members of the house-barge community are good stewards of the water and live in a very small ecological footprint, typically smaller than 400 square feet.