It calls for a dormitory housing 170 single students and 30 town houses that the village says could house 300 people.
The village says it cannot afford to build them.
The village said the two-hour rule was needed to separate and keep traffic moving.
The village has said it plans to appeal.
"It really brings you to tears," said a medical worker who has visited villages in the province.
Average bills are roughly half of what others pay, the village said.
"Boots and a whole missing village, just the same," Rohrbach said.
Now the village says the cost of rehabilitation is $18 million and too prohibitive.
"Only a small village, really," said Mick, "and not much of one, at that."
The village says its goal is enforcing the building code, not harassing Hispanics.