Reddit reviews An Oral History of SpongeBob SquarePants

Close, but incorrect. The houses are actually supposed to be made out of ships' smokestacks. Here's an excerpt from the "The Oral History of Spongebob SquarePants" quoting Kenny Pittenger, a background designer for the show in the beginning:

> The main thing was to keep everything nautical—so we use lots of rope, wooden planks, ships’ wheels, netting, anchors, and boilerplate and rivets. Most of the houses in Bikini Bottom are called “stack houses” because they were supposed to look as though they were fashioned out of ships’ smokestacks.

Source:

Tom Heintjes, An Oral History of Spongebob SquarePants, Hogan's Alley, the Magazine of the Cartoon Arts, (2012)

Edit: Same source but free online