Your small dog is at great risk.
A coyote recently took the small dog of a veterinary technician at my vet's from the front walk of her house; she was outside and saw it.
And if she saw the coyote, the coyote saw her.
The coyote did not get a good grip on the dog, and he got away, with a bite wound.
Animal control trapped the coyote; it was definitely a coyote.
Patrick's point about food and food waste is right!
But, in my opinion, the threat is more serious to your dog and other neighborhood pets than he says.
For the sake of the neighborhood pets, and for the coyotes themselves, you and your neighbors should never leave food or food waste out.
outdoors.stackexchange.com/users/6411/ab2
Coyotes tend to be pretty skittish around humans (although long exposure can acclimate them) and will normally be frightened off by loud noises or bright light.
For you personally, they are very unlikely to be a safety concern, though I would worry a little about your dog- a very small breed like that could be at risk.
Based on my knowledge, they ought to stay away from you while you are walking the dog, but I would not be letting it out of the house unsupervised (if ever you do so).
Other than that, try to make sure they can't get into your trash, and avoid leaving any other food or food waste where they can get it (e.g. compost).
If you happen to have a vegetable garden, it will likely do well with the sudden scarcity of rabbits and other small animals.
If you ever do feel concerned or threatened, call your local animal control or equivalent, and they will hopefully be able to capture and relocate them.
Law enforcement would likely attempt to kill the animals, so I'd ask you not to contact them except in extreme circumstances.
In most cases, these coyotes are going to stay away from humans and conduct their business only at night, and will quite possibly move on soon when food starts getting scarce.
Leave them alone and they will return the favor to you.
outdoors.stackexchange.com/users/6477/Patrick N
It's very rare that coyotes ever attack humans, so I wouldn't worry about that.
Small animals are another story.
I always shake my head when someone puts up a "Lost Cat" sign on a lamppost in my neighborhood.
It is definitely wishful thinking.
I have lived among coyotes all my life and have had plenty of encounters with them.
I've never had any issues, but I would not take my small dog outside if there were coyotes plainly visible 100 feet away.
You will definitely catch their interest, and it's asking for trouble.
outdoors.stackexchange.com/users/6528/Mohair
Watch out for your little dog.
When I was growing up in the high desert of LA County, I recall numerous incidents of coyotes snatching and killing small dogs from backyards in our community.
The coyotes would jump over the wall into the backyard, grab the dog and be gone before the owner would have time to do anything.
We never saw them during the day, but if you went outside in the early morning hours, on trash day, you'd usually see them eating from an overturned trash can.
outdoors.stackexchange.com/users/6502/DLS3141
In our neighborhood two small dogs have been snatched off the leash by coyotes (on the trail that runs along between houses and the preserve).
Be very wary.
outdoors.stackexchange.com/users/6357/Arluin
In our neighborhood near Santa Fe NM we have coyotes wandering around everywhere.
Small dogs and even large dogs are at risk.
a favorite coyote trick is for one member of the pack to act "lame" or injured and lure an unattended dog into chasing them to where they can be attacked by the entire pack.
We have lots of birds here because most feral cats and pet cats allowed to roam at night are quickly transformed into coyote food.
The Southwest US fits the common idea of where coyotes live and hunt.
BUT, there are both lone coyotes and coyote packs living in urban Chicago and probably every other suburban and urban area in the US.
They range from California to Washington DC and are interbreeding and changing their hunting habits as they migrate.
The northeastern coyotes evidently interbred with wolves and are much larger than both the southwestern and southeastern coyotes and have bigger stronger jaws and can bring down small deer.
You can get the full story here http://www.nature.com/news/rise-of-the-coyote-the-new-top-dog-1.10635 .An
interesting point is that analysis of the food of even urban coyotes (see http://urbancoyoteresearch.com/faq/what-do-urban-coyotes-eat ) hunt their own prey and are not in our midst to feed on our garbage and pets as much as to eat all the mice, rats and other pests that inevitably accompany human settlements.
Coyotes, crows and cockroaches were here long before we were, all do well wherever we live and all will probably be here when we are gone.
outdoors.stackexchange.com/users/6548/John Moore
Coyotes are coming through the lot next to my house. There are several. One ran across my driveway 2 nights ago. When I take my pomeranian out before bed, I hear them about 100 feet to the left of my house. By the time I take the dog in they are in the wooded area directly across the road from my yard. Is this something I should be concerned about and what can I do?
Pack of coyotes in my neighborhood
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<animal-behaviour><coyotes>
outdoors.stackexchange.com/questions/9053
outdoors.stackexchange.com/users/6527/Wilma Hontz
Small dogs and even large dogs are at risk. A favorite coyote trick is for one member of the pack to act "lame" or injured and lure an unattended dog into chasing them to where they can be attacked by the entire pack. Coyotes may also snatch dogs from back yards. For the sake of the neighborhood pets, and for the coyotes themselves, you and your neighbors should never leave food or food waste out.   They will quite possibly move on soon when food starts getting scarce. Small dogs are vulnerable to being attacked by coyotes, it is best not to leave food waste out.
Do not leave food waste out. Small dogs are at risk and can be targeted by coyotes.