Is the Party Over for New York’s Outlaw Houseboats?

At the most toxic end of Newtown Creek is a 130-foot, 270-ton vessel moored off a crumbling wall, floating near an oil boom and an open sewage pipe. Built in 1978, it was a ferryboat for 25 years, carrying some 100,000 vacationers each summer between Martha’s Vineyard and New Bedford, Mass. After being replaced by newer vessels, it was sold in 2005 and eventually made its way down to this dead-end waterway.

In its second life it became an illicit party boat, the site of Burning Man-style raves, and a home to artists and other off-the-grid types. Now, as the creek is being slowly cleaned up ahead of the next wave of gentrification arriving in this part of Queens, the boat — the Schamonchi — is a rusting symbol in the middle of a multimillion-dollar fight that’s pitting environmentalists, artists, and heavy industry in a fight for more control of the waters.

The Schamonchi is also very slowly sinking.

Boaters there remember it as an early squatting favorite. It predated the few dozen New Yorkers who would come and go over the last decade to take advantage of the quiet that came with living on Newtown Creek, a tidal arm between Brooklyn and Queens that is part of a larger estuary (and also a known former dumping ground for wastewater, oil, PCB’s, and other toxic chemicals). “It was way more of a small-scale home, a little weirdo family-type of vibe,” said Tory Censits, a Rockaway-based metalworker who used to stay on the boat around 2009 and 2010. “It was communal. Everyone shared, everyone would bring food.”

Newtown Creek gained a certain outlaw mystique because of boats like the Schamonchi, which attracted little attention over the next decade except the occasional police visit for loud parties and illegal tenants. A certain tabloid notoriety followed it after the fire department evicted the residents in 2013.

“It was really refreshing to keep something that had a little bit of rawness and, I don’t know, illegality,” Samuel Sutcliffe, an artist and architectural designer who kept an office on the boat.

But the Schamonchi’s party days are long gone. The ramshackle cabin, decorated with broken disco balls and silver tinsel, is overwhelmed by the scent of cat urine. With debt and litigation issues mounting, the boat’s owners may soon have to relocate the Schamonchi from the waterway it helped define.

Before it became a haven for off-the-grid squatters, Newtown Creek was one of the country’s busiest waterways during World War II. It was also a dumping site for oil refineries, coal yards and other industrial outfits. Though a massive federal cleanup has been in the works since 2010, when Newtown was declared a Superfund site, the glacial pace of its remediation has finally started to accelerate. Since April, the Environmental Protection Agency has made two crucial decisions about the scope of the cleanup, including asking more companies to participate.

Sensing this renewed future, more than a dozen condominium high-rises are going up near the creek in Long Island City and Greenpoint, and Columbia University, which already owns more than 36 acres of land in the city, has expressed interest in opening a boathouse near the…