A Place for Caregiving: LISC Strengthens Housing Stability for Home-Based Child Care Providers
Home-based child care providers are a lifeline for working families, yet they often face challenges with housing and financial stability. A new Q&A with LISC experts dives into their struggles, critical needs, and a pilot program supported by the Robert Wood Johnson Foundation to help them thrive.
Photo Above: Upgraded classroom at Ladybug House Child Care in Tucson, Arizona made possible by LISC Phoenix support.
People who take care of other people’s children in their own homes are vital players in America’s caregiving landscape. Some run small, home-based child care businesses on slim margins. Others are family, friends, and neighbors providing regular care.
Perhaps the chief challenge these crucial caregivers face is the struggle to secure stable, affordable, suitable housing—that all-important home to shelter both their own households and the children in their care.
LISC’s National Child Care & Early Learning team in partnership with LISC Phoenix are tackling this challenge with a new pilot program using Arizona as its laboratory. Supported by the Robert Wood Johnson Foundation, the pilot will bring together a cohort of thought partners tackling similar challenges to financial empowerment, appropriate and affordable housing stock, and homeownership across the country. LISC will publish a series of guiding documents and a community roadmap for providing tailored housing assistance to home-based child care providers, whether they’re rural or urban, renters or homeowners.
LISC Phoenix will also bring together organizations focused on housing, financial education, small-business technical assistance, and lending. This involves careful listening to the home-based providers LISC Phoenix already supports with facility-improvement grants. LISC will work across its nationwide network of local offices and partners to ensure the model is replicable far beyond Arizona.
Parents of young children are under enormous pressure these days. They typically need reliable child care in order to work; yet its average cost eats up anywhere from 8% to an overwhelming 19.3% of median family income. Parents raising families on low incomes often qualify for subsidies, but can’t get them due to long waiting lists, and then face impossible choices about how to allocate their limited time and money. In a recent survey of small business owners, more than a third reported that child care gaps have forced employees to cut hours or forgo working altogether.
Home-based care can be a critical piece of the solution. These providers offer lower costs, an intimate setting, and locational and cultural advantages that make them especially important in rural areas and communities of color.
To learn more about the sector and how LISC aims to strengthen it, we sat down with Bevin Parker-Cerkez, LISC national program director for Child Care & Early Learning, and Cynthia Melde, LISC Phoenix senior program director for Child Care & Early Learning.
Why are home-based child care providers important in Arizona and across the nation?
Cynthia Melde: In Arizona, home-based providers make up the majority of our care sector. We estimate that close to 60% of children are cared for by these providers. That includes formal home-based child care settings that are regulated, but also informal family, friend, and neighbor care.
Especially in our rural areas in southern Arizona, we have a strong presence of monolingual Spanish-speaking communities, and there’s a large preference for home-based care—for cultural reasons, for linguistic reasons. It's also typically more affordable than center care and provides flexibility in hours, which is really important for those who work in hospitals and the public safety sector, which run 24 hours.
Home-based providers are a lifeline, allowing parents in certain communities to be able to show up to work, go to school, or even just have a break from the demands of parenting.
Bevin Parker-Cerkez: It’s important to note that nationally, between 2005 to 2017, we lost 50% of home-based child care providers. So there has been significant shrinkage in availability of that care for decades now, and then COVID exacerbated that. Meanwhile we’ve recognized a shift in some parents’ preference toward having their children in these smaller sites. They're more familial, and especially for infant and toddler care that feels really welcoming and warm. Having fewer children in a space can also reduce risks related to COVID and similar public health issues.
When we're trying to increase child care spaces and access, creating large center-based locations doesn't always make sense, particularly in rural communities because there aren’t enough children there. So home-based care plays a really critical role in these communities to ensure it's the right size and meets the actual demand locally.
Who are home-based providers and what motivates them to choose this work?
Cynthia Melde: In child care, it’s definitely predominantly women—providing care, owning, and operating—especially in homes. And while women of color, Black and Brown women, predominate in all types of child care, that’s particularly true in home-based care across Arizona.
Tell us a little about the providers’ housing situations and challenges.
Bevin Parker-Cerkez: Historically, there was some thought that home-based providers were primarily renting properties. More recently there’s data suggesting that actually, most home-based child care providers are homeowners. And that's because it’s so difficult to stably operate a home-based child care space as a renter. There’s discrimination against them as tenants. Or if they discover the tenant is operating child care, they may increase their rent. When there is eviction, that obviously creates this very shaming process for folks. And public housing typically has a limitation on home-based child care.
Also, whether you rent or own there are licensing requirements around square footage, access to the outdoors, etc. Regulations can increase quality but there’s already a very limited supply of affordable housing. Once you take into consideration all the things we want for a quality early-learning environment, the pool of appropriate and available housing for this use is very small.
Cynthia Melde: When we were carrying out our infrastructure grant program, child care owners leasing their homes regularly asked, “How can you help me actually own my home so that I can know I’m always going to be in the space and can better invest in it?” We have some challenging dynamics for homebuying in the Phoenix market in particular. During the Great Recession, investors came in and bought up our single-family homes and turned many into short-term rentals, taking up space that could potentially be family child care homes. And then demand during COVID really drove up home prices, changing our Phoenix market from what I would describe as affordable to unaffordable.
Bevin Parker-Cerkez: That’s one reason we chose Arizona for the pilot. We’re exploring not just Phoenix but also the more rural market of southern Arizona. Part of the work is to understand what potential mechanisms look like in different real estate conditions, and then explore both homeownership and rental pathways. These findings will allow us to understand how to implement the right supports in other places across the country, with the help of our other LISC local offices.
Why is LISC the right organization for this work?
Bevin Parker-Cerkez: The child care sector is so nuanced, and has historically suffered from lack of funding, resources and, frankly, public interest in addressing the challenges. It’s time to get creative about supporting our educators, providers and communities. This pilot will leverage the expertise we hold across child care, housing, income and wealth building, and economic development—all critical pillars of our work.
To address the complex needs of home-based educators, we need to understand their roles—as individuals, small business owners, child care providers/educators, and renters/homeowners, all of whom should have access to income, wealth and stable housing.
This pilot will, naturally, focus on putting together a suite of housing-related services. Are there other types of assistance you hope to incorporate?
Cynthia Melde: We’re thinking not only about housing stability but also financial stability. We want to help these small businesses be profitable, so they’re not actually subsidizing child care as a provider. So business technical assistance is incredibly important.
In working closely with child care homes that received our infrastructure grants, we found some basic business practices were not being implemented. For example, we were helping them open up business checking accounts and untangling their personal and business financials. It’s a complicated situation because you’re using a private asset to provide care. During the day, you’re using your kitchen to feed children in your care, but then at night you’re feeding your own family. Even our accountants have been challenged in supporting them to file taxes correctly, so we’re doing education around that too.
Do you envision a particular format for delivering services?
Bevin Parker-Cerkez: Given how complicated these systems are for home-based operators, the ideal scenario is a seamless set of integrated supports that help a child care operator on that pathway to housing and financial stability. We’ll be investigating, what does the ideal set of supports need to look like, what is an ideal organization to house these services, and what partnerships and capacities need to be in place? A big part of our goal is getting more communities involved and interested in this effort; we want to offer them a prototype, a starting point.