"It's an American success story. ... Now we see in different cities people coming up with citizen driven solutions," Heben said.
Ministries in Texas and New York also are developing communities with clusters of small houses.
Mobile Loaves and Fishes plans 135 small homes and 100 recreational vehicles on 27 acres near Austin, Texas.
The Christian ministry that started 15 years ago bringing food and clothing to the homeless hopes to raise $7 million to build the homes, streets, utilities, sewers, a farming operation, medical facility and sanctuary, President and CEO Alan Graham said.
Residents would pay rent that ranges from $90 a month for a 150-square-foot home to $375 for 400 square feet.
"The goal is to reach everybody where they are economically," Graham said.
He expects a staff of 15 will run the village, with residents having the option to get paid to help with upkeep.
Community Faith Partnership near Ithaca, N.Y., has built six of up to 18 planned 320-square-foot houses as transitional living for homeless men, said Jim Crawford, the group's executive director.
The men will pay rent on a sliding scale that looks at their situation and whether they receive government aid.
The heart of the operation will be a community center where people who aren't social can learn to relate to others in a safe environment, Crawford said.
"We are bringing people into tangible housing but we are bringing them also into much less tangible human framework of social relations and that is the more difficult work," he said. "That is the more sophisticated work."