The Baked version of this Idea: Any living tree with a rotted-out interior and an opening to the outside. The available space is rather small, though.
The Impractical version of this Idea: Plant a sequoia tree and wait 3 thousand years for it to get big enough, then hollow out part of it to make
some living space (your house).
The actual Idea is going to take some explaining. Start by reading the first link; the first major point is, all the trees involved are genetically identical. That means any part of one can be grafted to any another without any biological rejection happening. The second point is, there are plenty of trees to work with, for this Idea (at least for one house!).
Now see the next link, involving the making of plywood --scroll down til you get to the "peeler lathe". For this Idea, we will want to do something vaguely similar to what a peeler lathe does, but perhaps somewhat differently....
From the appropriate forest we first dig up a number of whole trees, including significant chunks of root system. It might be best to do this in mid-winter, aiming to be done with the project just as the warm spring growing season begins.
We prepare the foundation for the house. A basement is optional, but strong underground walls are essential, and above-ground walls are probably necessary, too, as explained below, but they are strictly utilitarian, no need to look pretty on the outside. Multiple floors are certainly possible. There needs to be a significant trench around the house, almost like a moat waiting to be filled with water.
We next split the trees open lengthwise, and remove perhaps 2/3 of each tree's length of core-wood. This leaves us with a moderately thin layer of near-the-surface wood, plus the outer bark, plus the living "green" wood in-between. It is as if we had peeled this off of the core-wood. We keep the branches attached. Note that the roots basically splay out from the base of the tree in all directions, and are generally more a part of the outer tree than the core of the tree. We want to keep that! -- but if there is a "tap root", we discard it.
Windows in the house need to be tall and thin, and might even cross multiple floors. For the doorway, we need to imagine the entrance to an igloo as a guideline. More on that in a bit.
With the trees split lengthwise and "thinned", we can now open them and flatten them against the utilitarian walls of the house. It may be necessary to make additional vertical slices, not all the way through the tree-layers, to accomplish the flattening of the curved wood/bark. The roots go into the trench, and are buried and watered. As each split/flattened tree is placed against the wall, it is also placed against another split/flattened tree. We want the adjacent tree-edges to be grafted together lengthwise. And we want gaps between the trees where the windows are located, of course--but not above and below the windows.
If the trees are about 30 meters (100 feet) tall, we have room to bend them toward each other above the multi-floor house they are surrounding. We continue grafting them together until one combined tree rises above the house. Part of the purpose of the house-walls is to provide the strength that we took away, when the core-wood was removed. Appropriate glue can be used to attach the trees to the walls. Some additional support may be needed, above the top of the house, for the trees being consolidated there.
Regarding the doorways (every house needs at least two), think about how the flattened trees above the doorway need to reach the ground --that's where the igloo-style entryway comes into play. The wood is bent away from the door, to the sides, and again the roots are buried.
The net result is a very wide living tree-base, with a whole house inside it. And above the house the living tree rises as majestically as ever, though much narrower than the base. Note that every year, as the tree grows, it grows outward not inward. The wall of wood gets thicker with time, and eventually won't need the house-walls for structural support.