Five people who replaced touring caravans with static mobile homes have been told to dismantle them by a judge.
They asked the High Court to authorise the changes at Wickford in Essex, saying taking action would have "a devastating impact" on 12 children.
Basildon Council argued the five, all from the same extended traveller family, carried out illegal development in breach of an injunction.
They were found in contempt of court and will be sentenced on 5 May.
The site is two miles away from Dale Farm, which was Europe's largest traveller site until the council spent more than £4m in a legal battle to evict 80 families from illegally-built homes.
Thomas Anderson, Eileen Anderson, Winnie Anderson, Margaret Anderson and Arran Jones developed the land at Silva Lodge Kennels on Hovefields Avenue in Wickford, near Basildon.
Their barrister Paul Clark said: "The European Court of Human Rights recognises that the lives and culture of travelling people are under threat."
They apologised for breaching the injunction and did not realise they were doing anything wrong, he added in court.
During the two-day hearing, Mr Justice Kerr told the two men and three women it was "a serious matter" and upheld the original injunction granted to the council on 14 October preventing development.
Phil Turner, leader of Basildon Council, said: "We are pleased the High Court has stood by its previous judgement and reinforced the validity of the injunction."