For years, artists, techies and homeless people in Oakland have tried to build their own nontraditional dwellings in the city’s industrial pockets — but without proper permits and utilities, most don’t last.

Now, faced with escalating rents and an ever-ballooning homeless population, Oakland officials are rethinking what a home can be. And they’re ready to take a chance on the growing tiny house trend that has spread throughout the United States, most recently with a planned village in Sonoma County.

In June, the City Council set aside $80,000 for two small house models — one a single room, the other with a kitchenette, bathroom and sleeping loft — designed by carpentry students at Laney College. Once the designs are complete, officials hope to convert them into 100 easy-to-assemble cottages, each no bigger than 125 square feet. The city hopes to place these homes either on vacant public land or in donated church parking lots, and allow low-income families to apply to live in them, perhaps as early as next year.

Idea far from reality

Getting there won’t be easy. Officials haven’t yet found land for these houses, or figured out how to provide them with sewage lines, plumbing and electricity. Some could be equipped with solar roof panels or composting toilets, Councilman Abel Guillén said, but others might need special services from the city — like public showers.

Clearly, the idea is still far from reality. Yet it’s a concept the councilman hopes will one day take off.

“I think it’s a practical solution to solving our homeless crisis,” said Guillén, who persuaded his colleagues to approve the tiny house funding. He noted that homelessness has become increasingly visible in Oakland, with encampments sprouting up under freeway overpasses, and more people living in cars or RVs. An estimated 1,400 people sleep on the city’s streets on any given night, he said.

Ragtag shantytowns

In fact, tiny dwellings have existed for years in Oakland, but authorities have often viewed them as a nuisance and treated them like any other sidewalk tent or junk pile.

Two years ago, a group of go-it-alone bohemians set up their own shantytown in West Oakland, building houses out of shipping containers from the city’s port. Though the homes garnered national press for their ingenuity, neighbors complained about the noise and foul smells they generated. City officials cleared them out last year for code violations.

“They didn’t get permits,” said Rachel Flynn, head of Oakland’s Planning and Building Department. “There was sewage seeping out near a neighbor’s yard.”

Luke Iseman, who co-founded the shipping container community, said he’s since moved it to “an undisclosed location” in the East Bay.

‘Dignified space to be’

Meanwhile, artist Gregory Kloehn built several cottages for homeless people living along Oakland’s former 16th Street rail yard, not far from a cluster of swank new apartment buildings. Constructed from scavenged materials — including old pallets, plywood, futon frames and refrigerator shelves — many of these makeshift dwellings are so small and out of the way that authorities haven’t seemed to notice them, said Ricardo Huerta Niño, a tiny homes enthusiast and lecturer at UC Berkeley’s College of Environmental Design.

“In that area you’ll have these super high-end luxury condo enclaves, and then a row of three or four of these mini-houses scattered around them,” Huerta Niño said. “The homes are built in a day from old stuff that people dump, but they still provide a place to stay dry, and a dignified space to be.”

Yet it took a while for Oakland’s political leadership to embrace the idea of a nontraditional home.

“We’ve been waiting for someone to submit a plan, but it depends where they’d want to place them and what utilities they would need,” Flynn said.

The designs from Laney’s carpentry department are meant to be mass-produced, made from parts that fit together as neatly as the pieces in a jigsaw puzzle. Each house would have wheels, said department chair Cynthia Correia, so it could qualify as a mobile home and not be subject to building inspections.

Need to scale down

Correia sees tiny houses as the means toward a leaner future. Millennials can put them in their parents’ backyards to avoid the Bay Area’s booming real estate market, she said. They could also serve as in-law units, providing rental income for a person of little means. They could even function as disaster relief shelters after a major earthquake.

“It’s the inverse of the ‘McMansion’ concept,” said Danny Beesley, who is directing the small house project as head of Laney’s Fabrication Lab. “It used to be people wanted lots of rooms. Now, everyone wants only a little room.”

Huerta Niño said he’s thrilled to see Oakland take steps to legalize the movement.

“Housing is a national problem, and more and more folks are realizing that the market isn’t going to fix it,” he said. “There are people who are just going to be left behind if we’re not creative with our policies.”

Nonetheless. it will take quite a bit of work to get 100 homes up and running. And Guillén will also have to sell the idea to Oakland residents.

“Once I get the prototypes (from Laney), I want to shop them around town, have people get a look at them, and make sure they gain public acceptance,” Guillén said.

Avoiding mortgage

There’s already interest from Oakland’s tech-savvy “maker” scene. But Guillén said he also wants to reach regular working-class families who don’t mind trying an alternative way of living.

He knows of at least one early adopter: a public school teacher who bought a piece of empty land in Oakland, but didn’t have enough money for a house.

“So she built a tiny house on her property,“ Guillén said. “And now she doesn’t have to pay a mortgage.”

Rachel Swan is a San Francisco Chronicle staff writer. Email: rswan@sfchronicle.com Twitter: @rachelswan

Beyond Homelessness

Read The Chronicle’s special report on homelessness at http://sfchronicle.com/homeless.