The proposed paper draws on an ongoing ethnographic research project that investigates the politics of rebuilding taking place in the traditional Newar settlements in the Kathmandu Valley. The research takes up the ‘household’ as a primary unit of analysis to broach the issue of how claims of the community for the right to rebuilding to the heart’s desire, come up against governmental programs seeking to institutionalize norms of ‘heritage’ that are coded into the rebuilding by-laws. While planning furnishes cultural preservation and economic revitalization as rationale for foregrounding ‘heritage’ in the rebuilding of private homes, such a mandate also limits the ordinary households in their ability to rebuild. The research, as such, is located at the interface in which state-endorsed aspirational project of heritage confronts the everyday life of the ordinary that is filled with uncertainty. It is on this interface that this paper grapples with the following questions that may have normative implications for the field of urban planning, namely: What are the political-economic conditions of marginality that are reproduced through the cultural-spatial logic of ‘heritage’? How do local households and community reframe their identity and re-enact the ‘Newar’ subjectivity vis-à-vis the state-endorsed heritage rebuilding by-laws? And finally, how do the preceding questions expose a policy paradox to push for a planning praxis sensitive to the grassroots-based ideals of social justice vis-à-vis rebuilding?