A Daycare in Every Neighborhood

Loosening Childcare Laws Could Make the Dream a Reality
August 21, 2019

Being a new parent is hard. Babies are loud and unreasonable creatures. The lack of sleep that comes with a newborn can break even the most prepared couple. Parental leave helps ease some of the pain, but it’s not available for everyone and ends in a few short months. And when it’s time to head back to work, the pain doesn’t stop. In most places in America, daycare today is expensive, scarce or both.

Scarce, expensive daycare is a problem for working families but one that can be mitigated with sound public policy choices that proactively consider their needs. States and localities regulate daycare providers in two principal ways—land-use and labor regulations—both of which increase childcare prices and decrease availability. When rules are too restrictive, parents are forced to turn to informal childcare services or unwillingly leave the workforce, both of which are worse alternatives than enabling commercially available options in the childcare market.

Labor regulations dictate who can work in childcare services and how they must work. They set minimum training standards for childcare employees, including requiring providers to have a college degree in Washington, D.C. These regulations typically exist at the state level as part of occupational licensing rules. They can include mandatory training and classes, as well as minimum ratios of staff to supervised children and other specifics. Education requirements and staffing ratios are intended to head off potential health and safety problems, but when imposed without restraint, they make compliance costly and risky for childcare workers and businesses.

Land-use regulations, on the other hand, limit the spaces where childcare centers can operate. These are typically set at the local level, and often force daycare operators to be located in properties zoned for commercial uses. This dramatically limits options for small and new daycare providers, and forces working parents to drive their children from residential areas to commercial strips. Even where daycare centers are allowed in residential areas, towns can set the maximum number of children allowed or mandate the property have certain characteristics, like off-street parking for child pick-up and drop-off, commercial kitchens for food preparation and other changes that can force a would-be provider to renovate their property for use as a daycare center. Some towns place strict limits on the number of children a daycare center can serve, preventing successful centers from scaling up to meet parent demand. Together, these land-use regulations make potential daycare sites hard to find and expensive to renovate and operate.

Addressing the problem of scarce, expensive childcare will be a state-by-state affair. America doesn’t have uniform national standards for daycare regulation. Thankfully, efforts to reform state occupational licensing and local land-use regulations have become more widespread in recent years, and the prevalence of high childcare costs is a powerful argument for reform in both areas. Reforms to state licensing laws could lower minimum education requirements for caregivers, opening the market to many new and part-time caregivers. Alternately, a two-tier system that allows both “registered” and “licensed” facilities would provide more consumer choice and lower costs as a result. In Vermont, licensed facilities face more stringent regulations but boast lower staffing ratios in exchange.

Fixing land-use rules will be a more piecemeal task, with most of the work requiring updates to municipal zoning laws. Burdened town residents could make the case for expanding daycare availability, as happened in Arlington County, Virginia, earlier this year. But a broader fix could also be appropriate. Generally, costly childcare becomes a statewide issue if municipalities don’t allow enough places for daycare providers to set up shop. A reform-minded state could mandate that municipalities recognize small-scale childcare as part of the by-right uses of any residential property, up to some maximum number of children. There’s plenty of precedent, as such laws have been on the books in some states for decades.

Labor and land-use regulations make running daycare businesses too expensive and challenging in many places. Working families pay the price when we set needlessly high standards for who may care for children and narrow limits for where they may do so. For supporters of the status quo, that may sound reasonable. But for burdened households struggling to find someone to look after their kids, it’s more than enough reason to get loud.