Like I said, it's an illegal apartment. The only access to the water heater and furnace is through my spot.
Fair enough. Look to be honest, I would probably react badly to this happening to me personally.
But objectively, you are a good guy and a grown man, and unless he starts making unreasonable demands, just a point of pride. If you engage him, best case scenario you win a meaningless argument with some go who's not worth your time, worst case you get an even worse neighbour and maybe have to move out. Probably best to just let it go.