The Housing Challenges of Home-Based Child Care Providers

11.27.2023 - LISC Stories

Home-based child care providers are fundamental to our nation’s child care and early learning infrastructure. Oftentimes, family child care (FCC) providers or family, friend, and neighbor (FFN) caregivers are the most accessible, approachable, and affordable child care option available. It’s no surprise many parents prefer the familiarity, flexibility, and friendliness that home-based child care offers.

For years we’ve seen home prices, rent expenses, and interest rates soar while household incomes are stagnant or shrink. These market failures are disastrous for our nation’s home-based caregivers. Additionally, traditional public sector child care and small business supports most often miss the mark in meeting the needs of FCC and FFN microenterprises, which has meant that there is no clear government-backed safety net for providers who need financial support.

Consider America’s one million licensed, registered, licensed exempt, or legally non-licensed home-based paid child care professionals. They are women, disproportionately BIPOC, earning substandard salaries and operating on incredibly thin margins. They do not earn livable wages and are uninsured but every day, in communities across the country, they open their homes to infants, toddlers, children with special needs, and limited-income families. For home-based child care providers economic security and housing security are fused. Skyrocketing rents, historically high mortgage rates, and inadequate affordable housing options exacerbate provider hardship and survival. And then there’s the increasingly toxic tripartite of unruly landlords, unregulated homeowner associations, and licensing regulations.

In fact, according to RAPID data, more than one third of FFN caregivers and one quarter of home-based providers polled between June 2021 - December 2022 reported being somewhat or very worried about being evicted from their homes. Similarly, 66% of providers who do not own homes surveyed between July 2022 - December 2022 flagged the inability to afford a down payment as the biggest barrier to homeownership. Providers also cited the lack of availability of affordable housing, debt, a poor credit score, the inability to secure a loan, and job insecurity as homeownership hurdles.

In recent years, the early child care and housing markets have proven to be reliably unreliable, characterized primarily by perpetually high demand and low supply. Luckily, not all hope is lost. States and cities sensitive to these issues are introducing and enacting powerful policies to prevent home-based child care provider extinction. In 2021, Colorado policymakers recognized the regulations imposed on family child care homes as a burdensome cog in the state’s child care crisis. The Legislature enacted a statute that requires local regulatory entities reclassify family child care homes as residences thereby level setting compliance standards for home-based providers. This past June, Connecticut passed a law that enforces protections for licensed group child care homes and licensed family child care homes and prevents superfluous landlord restrictions. Following suit, Washington D.C. is deliberating legislation that prohibits new and revised condo bylaws, rules, and regulations from excluding licensed child care homes.

Likewise, LISC is tackling the child care and housing crisis by allocating ARPA dollars to develop affordable housing for providers. United by the belief that housing is critical, and the child care workforce should have equitable access to homeownership, LISC Milwaukee is partnering with the Community Development Alliance to provide affordable housing for childhood educators across the city.

“Our vision for the homebuyers is that they achieve housing stability, build family wealth and enhance neighborhoods, while also helping to close Milwaukee’s homeownership gap for people of color and making the early childcare education industry more attractive career choice,” stated Theodore Lipscomb, executive director of LISC Milwaukee.

After a competitive request for proposal process, a panel of housing, neighborhood, and government representatives selected a cohort of emerging developers committed to supporting and enhancing neighborhoods so residents can thrive. LISC Milwaukee selected a housing product with a proven track record to increase and retain value over time. The developers will utilize scattered and clustered city owned vacant lots within walking proximity to six child care centers on Milwaukee’s north and south sides. The plan is to build 45 single-family homes exclusively for child care providers and their families. The first home is expected to be completed by the end of 2024. The project is funded by a $5 million ARPA grant from the Wisconsin Department of Workforce Development, under Governor Tony Evers. To assist with acquisition, potential homeowners have received or are currently receiving homebuyer counseling services provided by HUD Certified Home Buyer Agencies.

LISC is inspired by the efforts of our partners and change agents across the country countering the post pandemic child care and housing catastrophes. Collaborating and creating sensible solutions that encourage healthy community development promotes both quality child care spaces and equitable outcomes for children, families, and yes, even child care providers.

About the Authors

Bevin Parker-Cerkez (she/her/hers), Program Director, Child Care and Early Learning
Bevin joined LISC in 2020 to support the growing work in LISC’s child care investment portfolio and currently leads the team in its work to build a national platform, deliver technical support, and assemble flexible capital. Prior to LISC, she spent a decade at Reinvestment Fund, a mid-sized CDFI, where she raised over $45 million in grants and program-related investments for the child care sector. There, she was also responsible for sourcing capital and implementing multiple COVID-19 response funds and is co-author of the “Home-Based Child Care Emergency Fund Toolkit”. Bevin frequently presents on and participates in research work focused on facilities financing and the integration of child care and community development. She is an active member of several networks and boards.

Megan Ressler (she/her/hers), Senior Program Officer, Child Care and Early Learning
Megan joined the LISC National Child Care & Early Learning Team in April of 2023, to support the initiative in its growing scale and scope across the LISC footprint. Prior to joining LISC’s national team, Megan worked in the local LISC Rhode Island office supporting the statewide Rhode Island Child Care and Early Learning Facilities Fund program. Megan was instrumental in supporting the 2014 and 2019 Rhode Island Early Learning Facilities Needs Assessments resulting in new state, local, and federal funding opportunities to improve and expand high-quality child care facilities. Megan served as a member of Rhode Island’s Permanent Legislative Commission on Child Care and holds a bachelor’s degree in business from the University of Rhode Island and a master’s degree in education from the University of Hartford.

Maggie-Leigh O’Neill [she/her/hers], Policy Consultant
Maggie began working with LISC’s National Child Care and Early Learning Team in July 2021. She supports the team with research projects, policy reports, and presentations related to early child care and education policy. Maggie holds an undergraduate degree in business administration from Ithaca College and a master’s degree in public policy from the Edward J. Bloustein School of Planning and Public Policy where she received the Public Policy Outstanding Student Service Award. Prior to graduate school, Maggie spent a decade specializing in municipal policies and procedures at Architecture/Master Planning and Engineering firms. She is committed to the creation, implementation and enforcement of equitable and inclusive policies and programs.