Advocates tackling the nation's homeless problem are thinking small.
In Austin, Texas, a village of 200 tiny houses is being built for the homeless. In upstate New York, Rochester Greenovation has designed a prototype for small-scale individualized shelters. "Homeless No More Survival Pods" have been built in Utah, micropods in Florida, miniature homes in Wisconsin and minimobile houses in California.
The "tiny house movement," once considered merely an architectural component to a downsized life, is now becoming something much bigger: an escape from chronic homelessness.
"This is a plan that could revolutionize the housing movement in the United States," declared Alan Graham, a Texas activist who says his self-founded organization, Community First, has already lifted 100 homeless people off the streets.
"The city of Austin loves us," he said. "They think we're on the verge of breaking the code."
Occupy Madison, an offshoot of the Occupy Wall Street movement based in Madison, Wis., finished building its first fully functional tiny house earlier this year. The 98-square-foot structure, complete with a bed, toilet and tiny kitchen, will serve as a template for 40 homes to follow, said Brenda Konkel, an Occupy Madison board member. It is hoped that the project, which depends on volunteer labor and community donations, eventually will end homelessness in the city.
"I think this is a solution for now," said Konkel. "Our first house cost $5,000 to make, and we did it without asking for government help."
But California artist Gregory Kloehn says there's an even cheaper and faster way. For the past several years, Kloehn has single-handedly built small, portable homes using salvaged materials he finds on the street. His cost? Less than $100 each.
"Stuff people just throw away on the street can give someone a viable home," said Kloehn, whose environmentally friendly structures are made of everything from wooden pallets to refrigerator parts. Kloehn's unique, whimsical designs are both artistic ("I make them cute and funny") and practical ("I want them to work well, be strong and watertight").
Most importantly, each Kloehn design is a thoughtful response to the problems faced daily by the homeless people in his community.
For example, Oakland's public safety laws require municipal workers to periodically sweep up and destroy the belongings of people living on the streets, something Kloehn hopes to circumvent with his mobile home designs.
"I was sleeping outside on the freeway for two or three years," recalled Oakland resident Cathryn Estelle Copeland, 39. "I was using cardboard for a cover. The police come there sometimes. If you don't move fast enough they just take your stuff away."
Copeland says having a tiny house changed her life.
"Now I can roll my house down the street. Now the police don't give me a hard time. I keep my house clean and I have no problems."
Breaking the cycle
While billions of taxpayer dollars are allocated each year to support shelters and social service initiatives, homelessness remains a persistent problem in the U.S. In 2013, an estimated 610,000 people slept without shelter every night, according to a report by the U.S. Department of Housing and Urban Development.
Advocates contend that not enough effort is made to break the cycle of homelessness, while too much money is spent on punishing behavior related to it. A 2011 report published by the National Law Center on Homelessness and Poverty says local governments routinely criminalize activities that go hand-in-hand with living on the street, such as sleeping in public spaces and loitering. Incarceration costs taxpayers $34,480 per inmate per year, according to the National Alliance to End Homelessness.
"Homeless people spend excessive time in jail or prison, often for petty offenses such as loitering," stated a 2011 Utah government report. "The penal system frequently serves as emergency shelter for the chronically homeless, at far greater cost than other more appropriate options."
An inexpensive structure like a micropod—with insulation, a small bed and a place to store belongings—is a good, temporary solution to keep a person warm, safe and out of jail, said Kloehn.
"Does it have merit as a solution to homelessness? As far as giving people a shelter, yeah, definitely. Is it a solution to homelessness? It's an answer. An attempt."
Historically, measures that offer temporary respite from homelessness have often failed because the problems that cause it—poverty, addiction, mental and/or physical illness—are often chronic. But recent evidence shows that access to social services combined with the safety and security of a permanent home can be effective in breaking the cycle of chronic homelessness.
For instance, Utah's "Housing First" program, which gives free, permanent "no strings attached" apartments to the chronically homeless, claims to be on track to eradicate the problem. The program, which costs $11,000 per apartment annually, has a reported 74 percent success rate. The 10-year pilot program is in its ninth year.
While some people believe individual microhouses could provide the same benefit, others say turning the fantasy into a reality isn't easy.
"Our city government [thought] the homes might be a magnet to crime, or make the city look bad," admited Jay Rowe , executive director of Rochester Greenovation in upstate New York. Rowe says the organization's project, Tiny Homes for the Homeless, was stalled by red tape and "a whole bunch of maybes."
But tiny home proponents say they won't give up.
"There were concerns about safety and property values and noise and trash," recalled Occupy Madison's Konkel. "I reminded them that these people were already living in our community."
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Estimating that 100-400 people sleep on the streets of Madison nightly, Konkel describes Madison's police force as "very understanding and appreciative" of the tiny homes project. She hopes that having the comfort and protection of a real house will help Madison's homeless rebuild their lives.
"Where there's stability and a home base, safety and normalcy, the mental health issues some people have are alleviated," she said. "It's not cured but it's easier to manage."
Graham agrees. He says his Community First village is all about healing people who have experienced profound rejection from society, by welcoming them back into the community.
"People think if you build a bunch of houses you've 'solved' homelessness," he said. "I don't buy into the word 'solution.' It's less an issue of 'curative' than 'palliative.' By virtue of relieving their suffering, we hope to make a positive impact. These are God's beautiful, broken children."
—By Linda Federico-O'Murchu, special to CNBC.