"There's other people that are like, no, no, I have to have my big living room with my big couch," she told CBC Radio's Daybreak North.
"If you are doing it yourself with very basic skills, you could probably do it for about $15,000 to $20,000."
Prince Rupert Mayor Lee Brain is interested in Wheeler's idea and said it will be presented at a city council meeting in January or February.
"A lot of other communities have other major developments happen to them and people end up living out of their cars for four years," Brain said.
Wheeler studied carpentry at North West Community College in Terrace, B.C. and received an innovation award for her tiny house design.
She wants the first tiny house in the proposed community to be her own, with just 600 square feet of floor space.
Wheeler said tiny houses have benefits beyond lower building costs.
"Seniors wanting to downsize or snowbirds would find something like this to be more convenient than living in a huge three to four bedroom house."
Hear Carolina de Ryk's report on Tracy Wheeler and her tiny home idea by clicking audio link labelled: Tiny homes in Prince RupertSuggest a correction