The dog house you're building sounds wonderful. I have one in an x-pen for Gus and he absolutely loves it.
I have to agree that 1 foot walls will probably be too low as he gets bigger. It won't be much of a challenge if he really wants to get out.
It can be very frustrating but we chose tiny dogs with tiny bladders that are known to be hard to housebreak. He might learn in a few months or it could take a year. That's how long it took for my Gus to be housebroken...and I'm with him all day. I started to think it would never happen. They are worth every bit of frustration though, aren't they?
Good luck - you sound like a great dad.