HOUSING the homeless in converted shipping containers in Gatineau near Ottawa, the Canadian capital, is proving to be a success say some, reports CBC News.

On a parking lot Village Transition aims to reduce homelessness by providing private and safe lodging to residents who previously lived in tents.

The first residents moved in shortly before Christmas and already the 40 units of the project's first stage are full.

"It's small ... but it's perfect," said one homeless woman.

"Everything's new. You can choose your colours of your curtains, colour of your sheets on the bed, and everything's in there when you go there: toaster, coffee maker, everything's there," she said.

As the residents settle into their new units, local councillor Steve Moran says this is a step in the right direction - but not a permanent solution.

Village Transition offers transitional housing for up to five years, charging residents rent pegged to 25 to 30 per cent of their income.

With Village Transition's first 40 units full, the project is now hoping to expand to 100 units.