The proposed Chicago budget includes money for tiny houses to fight homelessness:

Now, under Mayor Lori Lightfoot’s 2023 budget that passed last month, the city will direct $3 million in federal COVID-19 stimulus funds toward a tiny homes project that she said will be the “first of its kind.”
Though a small fraction of the nine-figure sum the city will spend on affordable housing investments, “we must push ourselves to be creative,” Lightfoot said when she unveiled her budget. “Tiny homes are an interesting innovation that we should embrace as a city.”
Cron said that was a long-sought victory for his organization, which has watched the concept take off elsewhere in the U.S., including several in Midwestern states. He blamed the earlier resistance on “red tape” and “politics” hindering city officials from moving forward…
Upon construction, the 500-square-foot tiny homes will compose a “micro-neighborhood” on two to five city-owned lots, with an average of two to four homes per lot, Department of Housing spokesperson Eugenia Orr said in a statement to the Tribune. The housing will be long term, with heating, plumbing and other required features under the Chicago building code. The structures will not be mobile, unlike the RV homes that make up existing communities in some pockets of the Chicago area. Specific locations for the city pilot program have not been determined.
Though the project is pitched to combat homelessness, the city intends to cater to specific subpopulations such as veterans, new mothers, LGBTQ youth and high school or college students, Orr said. She also listed “nontraditional” students, young professionals and members of a “limited-equity co-op,” a homeownership program where residents buy a share of the complex and resell it in the future.
I would be interested to know how much the pilot program follows practices from other cities and makes changes for the particular program, context, and goals in Chicago.
Additionally, if this shows promise, how might it be scaled up? I imagine finding sites is difficult and these micro-neighborhoods benefit from services. Can a larger version of this put a significant dent in homelessness in Chicago or is this always a viable option among a number that are needed?
Even more broadly, does this hold promise for addressing affordable housing in Chicago? Can tiny houses provide enough units to help people have good permanent housing (and ownership, as suggested above)?
Perhaps programs like these will help unlock the potential of tiny houses. Instead of being luxury items for those who can afford it, they can provide housing for those who really need it but cannot access larger and more expensive housing.