great idea, I have a few of those figures and was thinking I'd do this someday too.
Yes, scratch building is your best option to make exactly what you want in your diorama. As Bronto describes, that is about 1/12 scale.
Various types of woody foliage from vacant lots or the garden can make trees if broken up correctly.
Cylindrical caps from laundry detergent or something can be trash cans etc.
There is a whole line of Doll house stuff in 1/12 scale. A lot of it looks Victorian era-ish but might be what you need.