This paper offers insights into production of vernacular architectural heritage that result from disruption caused by disaster such as a flood in a city. To understand the complexities surrounding vernacular heritage, this paper proposes a conceptual approach derived from Lefebvre’s theory of production of space constituting the triad of spatial practice, representation of spaces and representational space. The strength of this approach in explaining resilience and vernacular architectural heritage is illustrated by examining rehabilitation settlements that evolved after the devastating floods of 1961 in Pune (a city with a population of 4.5 million). The paper focuses on the rehabilitation process that was undertaken in response to the floods and relies on secondary data and primary field observations in the rehabilitated settlements. It was found that these settlements had twofold characteristics; externally, they directed the trajectory of growth and expansion of the city owing to their strategic location in the periphery around the old core, and internally within, they contributed to reshaping of urban form and vernacular architecture as the affected people reconstructed their houses and everyday lives. A significant contribution to the making of these rehabilitation spaces was the state’s provision of land for rehabilitation and encouragement to the mechanism of Cooperative Housing as a representation of space incorporating contemporary planning ideologies. These settlements comprised the ‘architecture of the dispossessed’ where material culture and imagery informed different and hybrid forms of houses but these were a departure from the past as they needed to accommodate rebuilding and expansion while serving aspirations of those affected.