MEXICO CITY — The ancient canals of Xochimilco serve as Raul Jimenez's backyard, and they provide him with an income as he floats along the waterways selling toy boats and wool blankets to tourists.
But officials say he and at least 25,000 people are living illegally on the federally protected marshland.
"My home is here. It's private property, and that's all," Jimenez retorted, then paddled his skiff away from further questioning.
Declared a World Heritage Site by UNESCO in 1982, Xochimilco's canals have been overrun by illegal housing settlements that pollute the already filthy water and gobble up space for chinampas -- the floating islands of crops grown with techniques dating from the Aztecs.
"The sprawl moves so quickly; one day there may be little else left," said Ciro Caraballo, a development expert assigned by UNESCO to slow the damage to Xochimilco, which is pronounced "soh-chee-MIL-co" and translates as "Place Where Flowers Grow."
Xochimilco, like most of modern-day Mexico City, was once a sprawling lake. Beginning in the 1200s, Aztecs dug up mud from the lakebed, then packed it on rafts of boards and dried vegetation to create islands.
Trees eventually sprouted on the islands, holding large swaths of new land in place with their roots and creating the edges of what are now Xochimilco's canals.
Spaniards first gazed on the region in 1519 and called it the Venice of the New World.
Today, the canals attract 1.2 million visitors a year who come for leisurely trips in trajineras, colorful flatboats pushed along with long poles.
UNESCO opened a Xochimilco office a year ago to take a more active role in conservation efforts. The office plans to issue a report in February offering ideas on how to pursue conservation efforts without upsetting the area's residents.
Xochimilco was declared an international treasure in part to protect its floating islands of flowers, corn, pumpkins, beans and other crops.
But as the area becomes more popular for housing, it is getting harder to persuade small farmers to stay.
To complicate matters, some farmers are living illegally and could face eviction, like Albino Cuevas, 62, who has used chinampas to grow flowers, small trees and spinach for more than five decades.
"Wherever you are in this city, you have to invade property to establish a home, otherwise there's no way to pay the rent and live," said Cuevas, who lives with his wife, four children and four grandchildren in a shack near the edge of a canal.
Sergio Mendez, Xochimilco's liaison with UNESCO, says it is difficult to evict people who have illegally built houses on land that has belonged to their families for centuries.
But the area also draws newcomers who squat on protected land at alarming rates, some building handsome houses and others tossing up shanties.
Xochimilco's population doubled in the last 25 years; it now has around 400,000 living in its 49 square miles -- roughly the area of San Francisco. It continues to grow by nearly 5% a year, far above the growth rates elsewhere in the city.
At least 25,000 people have moved onto protected lands since a 1992 decree designed to halt development, Mendez says. One-fifth of those dump human and animal waste directly into the canals, he says.
Faustino Soto, Xochimilco's borough president, says his administration is taking a "realistic, not utopian" approach to the illegal settlements, leaving long-established properties alone while focusing on stopping new ones.
Mexico's federal, state and local governments have given him a conservation budget of nearly $60 million for 2005, which will be used to plant trees and line the edges of canals with sticks to prevent erosion.
A UNESCO world heritage designation does not bring monetary help, but generates tourist interest and makes it easier to attract international funds. Mexico is among the world leaders in world heritage sites, with 24. The United States has 20.
In February, Mexico designated Xochimilco as federal marshland, establishing new protections for fish and the 120 species of birds that inhabit the area at least part of the year.
A multitude of problems remain, however, for the former town long ago gobbled up by the capital's southern sprawl.
Mexico City has used up the natural aquifers that once fed the 120 miles of waterways, and the water now flowing through the canals is mostly lightly treated runoff and sewage.
Erosion has shrunk dozens of canals. Others have been paved over for the district's narrow, traffic-clogged streets.
But overpopulation remains the largest threat.
At least once a month, police evict new squatters, many of whom live in cinderblock and corrugated metal shacks so close to canals that their clotheslines stretch out over the water.
"We try to keep the canal area at zero growth," Soto said. "But it's not possible to stop all the new developments."
Mendez, the district liaison, says about 5% of Xochimilco's residents make a living as farmers and less than 1% still rely on chinampas.
"It's living history," he said. "But it may not be alive much longer."