I have prepared a
grass bird house for my little Kitney. It is made of grass fiber. I think it great to keep it warm and make it feel familiar.
As far as the "safety" aspect in-comparison to the "Happy Huts", what you're using looks pretty safe, as it doesn't have any fabric/fleece/material that they can pick at and eat little bits of over-time, nor does it have any threads in it that come loose and can hang them/get wrapped around their legs. So that's good...
However, this wouldn't work well for a lot of birds because it's still creating a small, dark place for them to get into, which typically will cause their hormones to go crazy...Especially if you have a female bird, anything like this at all can and usually does encourage not only hormonal behavior, but chronic egg-laying. Anything that creates a small, dark place that they can get inside of or underneath, or anything that resembles a "nest" like this can cause their hormones to kick into action, so you're likely to get all kinds of unwanted, hormonal behavior, everything from continual/constant regurgitation and masturbation to egg-laying to sudden aggression/biting to plucking/self-mutilation.
The thing that most people don't realize or understand is that "pet" parrots, even when bred in captivity and hand-raised/hand-fed by a person, are still "wild", and they all possess their natural, innate instincts...In the wild, parrots don't have issues like this because they don't sleep inside of boxes, Happy-Huts, etc., and they don't sleep on their backs; they sleep on tree-branches/perches. So there is a very fine-line between us wanting to make them a part of our families and wanting them to be comfortable and giving them "beds", nests, etc., all of which is done with a well-meaning intent, and us doing things/encouraging things/giving them things that cause very unnatural behaviors and uncommon physical/health issues. For example, you certainly don't want to cause your parrot to start laying clutches of eggs over and over and over again, which can not only cause nutritional-deficiencies but often leads to egg-binding and death, all because we want them to be able to sleep in a "bed" or inside of a "nest" or confined-space that we think "makes them feel comfortable", when in-fact it's not making them feel "comfortable" at all, but rather causing them chronic/constant, unnatural hormonal-behaviors.