Childcare is getting even more expensive as providers battle landlords and zoning regulations at a time when federal funding is running out

• Childcare costs are out of control for many parents, while providers are struggling to make ends meet.
• Zoning regulations and housing discrimination can pose additional obstacles for providers.

Childcare costs are soaring, particularly in major US cities — and zoning regulations are making it worse.

Costs aren't just prohibitive for parents, they're also sky-high for providers, who operate on tiny margins and struggle to pay their workers a living wage. The financial situation for providers is about to get worse as the nation nears the end of federal pandemic relief funding for childcare providers, which is predicted to disrupt care for 3 million children.

The funding cliff further exposes the fundamental flaws in the business of childcare. Childcare experts and advocates argue that the industry simply cannot function well without significant government subsidies.

But the way we build cities throws up other less-obvious obstacles to an effective US childcare system. Land-use regulations drive up costs and limit the supply of physical spaces. Some zoning and other building regulations make it extremely costly and complicated for a provider to open up or expand a facility. Of course, the housing affordability crisis is making all of this worse, as the cost of rent means it's increasingly difficult for providers, especially those who provide childcare in their homes, to afford their spaces.

Childcare facilities often aren't allowed in residential areas, where kids live

Childcare providers that operate out of residences — known as home-based childcare — often have the most trouble with these regulations. Many cities and towns make it illegal for businesses to open up in homes. And the majority of zoned land in US cities is exclusively for single-family homes.

Ironically, laws that were supposedly designed to protect children by keeping businesses like childcare centers out of quiet residential neighborhoods are now hurting them, experts say. Historically, separating residential neighborhoods from businesses and industrial sites was justified as "providing a safe and quiet environment for the rearing of children," said Charles Gardner, a housing researcher at the Mercatus Center at George Mason University.

"Bearing that in mind, it would seem on its surface odd that zoning codes would prohibit childcare facilities from opening in residential zones and require that they operate in commercial districts where there may be more noise, more commotion, more traffic," he told Insider.

These home-based operations are a key service. They often satisfy linguistic and cultural needs families have, can operate in places without easy access to business districts, and providers can care for their own young kids while also doing their jobs.

Some states and cities are starting to eliminate some of the barriers to opening up or expanding a facility, particularly those in peoples' homes.

In 2019, California passed a law that prohibits any city or county government from requiring home-based childcare providers to get a zoning permit or business license. This allows childcare centers to operate out of all types of homes and avoid getting community approval, which disproportionately empowers homeowners and older, wealthier folks.

But implementing the law is proving difficult. Many cities just aren't complying — often because they don't know about the state law. And affected providers don't always know their rights. Laurie Furstenfeld, an attorney at the Berkeley, California-based Child Care Law Center, is working with cities to get them in compliance with the law.

"We have been doing Public Record Act requests lately for a few cities just to see if they are charging them and unfortunately, a lot of them have been, even when they say that they're not," Furstenfeld said.

Landlords often discriminate against renters wanting to open a childcare center

Another insidious problem is landlord discrimination against childcare providers. Furstenfeld's organization is working to sue property owners for evicting or refusing to rent to providers, but it can be hard to prove.

"It's a pretty bright line rule with the zoning and business licenses. It's a bit harder to get to the heart of when somebody denies somebody to rent," Furstenfeld said.

Some states are also addressing issues impacting childcare in residences. Oregon, Oklahoma, Colorado, Connecticut, and Montana have all passed legislation making it easier for home-based providers to operate. The Washington, DC, city council recently passed a bill that would ban discrimination against home-based childcare providers by condo associations.

But even without many of these burdensome land-use regulations, childcare will likely still be exorbitantly expensive for too many parents and bad business for providers.

"In our ideal world, it would cost nothing for providers to go into business — the background checks, the trainings, the licensing would all be cost-free," Furstenfeld said. "The cost of parents would be heavily subsidized or publicly funded."

She added, "Nobody would question not funding public schools. Why not childcare?"