Yes, that is the playhouse.
I had the rental chickens under there during the day last year and it wasn’t ideal. But no matter what, they will have access to that area. We aren’t using it for anything else and it’s a nice place for them to get out of bad weather. It has electricity and easy access to the hose for water. If we built a separate coop and run off to the left, the chickens would have less space and it would be harder for me to take care of them overall. Converting the upper level isn’t an option right now. My husband put a lot of work into that and the kids still use it. The inside has a sleeping loft, ceiling fan and nice flooring left over from one of our condos. While it would be hysterical to put chickens in there as-is, I’m not going to fight for it just yet. LOL
Option #1. 4X8 attached to the back and tall enough to walk into. The roost would be removable for cleaning and there would be doors on both ends with some kind of windows on the back. This is where we got into the issue of attaching anything to the Hardi Plank siding.