Birds are everywhere, but we've always enjoyed having an actual birdhouse to keep an eye on what kinds of birds are coming and going in our neighborhood. Kids (and cats) love them, too. We came across an inexpensive one recently that's made from recycled paper materials and is also a blank canvas for your kids to decorate.
It's made by a company called GreenBird and is called the Earthcraft Birdhouse. Chipboard recycled from boxes and scrap cardboard and recycled, used copier paper make up the three layers of the structure which are then laminated together. The houses are hung with a 100% cotton biodegradable strap. They're intended to be used for one nesting season and then composted or recycled.
They're shipped flat so you do need to assemble them yourself (very easy). You and your kids can decorate them however you like - with paint, markers, decoupage, stickers, etc. Just keep in mind that while they're sturdy, they are made from paper and will be exposed to the elements so you should consider that when decorating them.
Learn more about the Earthcraft Birdhouse or order one for $12 here.