Members of Wytaliba's alternative community planning the rebuild of their homes are concerned planning approval rules could make rebuilding so unaffordable it could exclude half the village.
And one bushfire victim said the community, founded as a hippie commune in the 70s, may be forced to finance rebuilding through the "grey economy".
Glen Innes Severn Council this week confirmed the community will be required to follow development consent and building certification rules for "replacement" dwellings, laws that have long been flouted in the village.
Long-time resident David Pieters said some residents may be forced to take desperate measures to afford to do so.
"I'm sure they are (concerned about the cost), but they'll be thinking about the grey economy. That might be able to help in the financing of these ventures, I don't know," he said.
"There is a safety net net there for people."
Founded in 1979, a historic of fire safety standards left the village less defensible from bushfire, according to local fire captain Kym Jermey.
"People back then built things out of mud brick, bottles, straw bales, you name it - every hippy rave on the planet - and the council were happy to turn a blind eye to it," he said.
Those unapproved homes bore the brunt of a firestorm last November with the deadly Kangawalla blaze crashing through the village, wrecking around 50 dwellings and killing two residents. The community spent the Christmas break planning a rebuilding process.
But much of the community may not be able to afford to build back better, he said.
"These people are quite poor and especially now they've lost their houses they've got nothing. And now they're expected to build very expensive council approved, fire approved houses from town," he said.
"The community I think will survive it; it'll be nothing like the community was before though.
"It'll only be a certain type of people and it'll take much longer to rebuild the community because it's only going to be people who can afford it.
"I'd say our community's probably going to shrink by half, roughly."
Council director of development, regulatory and sustainability services Graham Price said in a statement that the council has little choice.
"Wytaliba residents have been advised that there is a requirement that all replacement dwellings will require development consent and the appropriate building certification," he said.
"Council has no flexibility in this regard as the same rules apply for everyone in the local government area."
He said the Glen Innes Severn council plans to waive or reduce application fees for the 90 or so fire damaged properties across the LGA, pending sign-off by councilors.
Fire damaged properties will be assessed "as a priority" he said.
They also have lobbied state government to waive a range of statutory fees and provided an information day with council staff and a bushfire building expert from the University of Western Sydney.
David Pieters said there are many unapproved dwellings still standing; he said he thought they would probably be allowed to stay as they are, creating a double standard.
"What are they going to do, bulldoze them? I don't think so, it's not the West Bank (in Palestine)!"
His house is not one of the survivors. Known as the 'tavern' and one of the first dwellings completed in the village, it was totaled in November. He walked through the firestorm to escape to safety.
But he said there was a "positive vibe" in the village, with most young homeowners with families already planning to rebuild.
RFS captain Kym Jermey hopes the new rules will give the village a better chance when the next firestorm hits. November's blaze spared many better-built houses, but the cheaper ones often had no chance, he said.
"From my personal point of view, it'd make me happier that I'm not trying to rescue people living in basically tinderboxes and stuff," he said.
"If we ever get something like this (again) there's less likelihood of anyone dying."