This commentary is by Erin Roche, who is the director of First Children’s Finance Vermont. She works with childcare businesses statewide on planning, financing and expansion.
Housing is on everyone’s minds these days: how to build more of it, and how to make it affordable for more families. There are many ideas to increase funding and reduce regulations to make it more attractive for developers to build in Vermont. But housing is also directly connected to another challenge: access to childcare.
In 2023, Vermont began investing more public money to make childcare more available and affordable, and it’s working. I’ve seen firsthand how public investment helped childcare programs that might otherwise have closed. I’ve seen entrepreneurs write business plans, apply for grants and loans and successfully realize their dreams of owning a business. I’ve also seen homeowners create inspiring spaces to care for children.
The number of childcare programs in the state has increased modestly during this time, and the number of childcare spaces has grown enough to reduce the overall gap by 19% over the past two years, according to a recent analysis we conducted for First Children’s Finance. Public investment has enabled home-based family childcare owners to earn a better living. Yet the number of these businesses, so integral to rural communities, has barely stabilized after a decade of decline. When people ask why Act 76 hasn’t led to more growth in family childcare, I point to housing.
By definition, these are home-based businesses, so the first thing they need is a home, and not just any home. To care for up to six young children and four school-aged children after school hours, these entrepreneurs need adequate indoor and outdoor space. Homes that meet those needs are increasingly expensive and difficult to find. Vermont’s homeowner vacancy rate is just 1.2%, well below the level considered a healthy housing market.
For some, housing instability is directly tied to whether they can continue their business at all. In my work, I’ve seen this play out firsthand. Sabrina Weber in Bennington recently lost her rental and is now searching for a home where she can both live and run her program — not just a personal upheaval, but the potential end of a business she built from scratch.
Josephine Boardman, a former family childcare provider in South Burlington, hit a different kind of wall. After her HOA ruled her program out of compliance, she was forced to close and has spent months searching for a new location — despite having families ready to enroll and years of experience behind her.
If we want more family childcare homes, we need to make it easier for people to find and afford homes in Vermont.
Our analysis revealed that 113 of Vermont’s 379 family child care homes have operated for at least 20 years, including five for more than 40 years. Similarly, our recent survey of childcare programs in Vermont found that 18% of family childcare homes had been in business for more than 30 years. Like many industries, the sector is approaching a wave of retirements that could create additional gaps in child care availability. Unlike many small businesses, family childcare programs cannot simply relocate to a commercial space.
There are also reasons for optimism. In that same survey, 35% of family childcare homes have been operating for two years or less. We also continue to see strong interest in the Make Way for Kids Infant/Toddler capacity-building grant program. A First Children’s Finance review of grantees from 2023-2026 showed that 28 new family childcare programs were started by people ages 18-34.
In our work with prospective providers, housing, wastewater, zoning and fire code requirements emerge more frequently as barriers than child care regulations themselves.
While Vermont continues to work on housing solutions, the state could also consider allowing family childcare programs to operate outside of the provider’s primary residence. Right now, state regulations require family childcare to operate within the provider’s home. Providing care in another setting requires a center license, which comes with additional regulations and higher operating costs. Other states allow more flexibility in this area, and a similar approach in Vermont could create a pathway for new providers to start small, build stability and eventually purchase a suitable home for both living and operating their program
Family childcare programs are the right size and setting for many families, especially in rural communities. If we want to make it easier to start and sustain these programs, we should not compromise on quality or educator preparation. Instead, we should consider targeted flexibility around where care can be provided and prioritize housing development for Vermont families.
If we want young families to start family childcare programs, we need homes they can realistically afford, or we need to make it possible to operate these businesses without requiring homeownership.
