Anna Pickel stands outside her recently opened child care center, Happy Go Lucky ChildCare, in Portland, Ore., more than three years after she began working to expand her business from a home-based center to a larger facility in 2021. (Courtesy of Anna Pickel)
Reporting for this article was supported by New America’s Better Life Lab.
Parking spots. Sprinkler systems. Earthquake building codes. These were some of the unexpected infrastructure issues Anna Pickel faced during the more than three years she sought a space to grow her home-based child care business near Portland, Oregon, from 15 children to 82.
She looked at more than 100 properties but found that most vacant retail storefronts had to be rezoned to be used as child care centers, or they hadn’t yet been updated to meet the state’s earthquake safety standards and would be too expensive to renovate. At the same time, Pickel was getting daily calls from parents searching for child care spots for their children, but she had to turn them away because her in-home space was too small.
Even when Pickel found a space in a mixed-use commercial and residential building, the construction costs ballooned so much that she had to put a lien on her home to secure a bigger loan.
“I was all in, with personal assets on the line, and it was a very big risk,” Pickel said. “I think a lot of people would have just given up.”
Multnomah County, where Portland is located, is considered a “child care desert” where there are more than three children for every regulated child care spot. Nationally, more than half of all Americans live in child care deserts, and the need for child care is especially great among families with low and middle-income families, families of color and families living in rural areas.
The lack of providers nationally has driven up prices. In 2022, the median annual cost of full-day care was $15,600, more than the median rent of $15,216, the U.S. Department of Labor reported. The scarcity of affordable child care also keeps parents — primarily women — out of the workforce, and costs the U.S. economy roughly $122 billion each year in lost earnings, productivity and revenue, according to a report released last year by the nonprofit Council for a Strong America.
To create more child care slots and reduce prices, lawmakers are increasingly using economic development strategies to help child care businesses expand, similar to the support they’ve offered to attract and expand manufacturing facilities, technology startups or other types of businesses.
We’re recognizing that child care isn’t just a women’s issue or even a family issue, it’s an economic development issue because child care is work-enabling infrastructure.
– Lindsey Cochran, child care infrastructure fund coordinator, Business Oregon
In states including Colorado, Nebraska, Oregon and Vermont, lawmakers from both parties have in recent years created building construction and renovation grant programs, appointed task forces to review local and state zoning regulations and set up help centers where child care business owners can get help with navigating permitting and other business rules so that they can expand their businesses and care for more children, which will help more parents stay in the workforce.
It’s a novel approach to increasing access to child care, and, advocates say, it affirms that child care businesses — 90% of which are owned by women, more than half of them women of color — are economically critical, said Lindsey Cochran, the child care infrastructure fund coordinator with Business Oregon, the state’s economic development agency.
“We’re recognizing that child care isn’t just a women’s issue or even a family issue, it’s an economic development issue because child care is work-enabling infrastructure,” Cochran said.
Focus on rural areas
State lawmakers are particularly focused on growing child care businesses in rural areas. This year, Oregon is awarding its first batch of $50 million in grants and loans for new construction, expansion and renovation for child care businesses, with priority for child care providers in rural areas, those offering infant and toddler care, and those offering culturally specific care, such as care provided in Spanish or care tailored to children from Native American families.
In Nebraska, the legislature created a pilot grant program to cover construction and renovation costs to add child care centers to the state’s nursing homes or assisted living facilities. The bill passed unanimously, but the $300,000 program is only large enough that three centers can participate in the first year, and the state is still working out specific safety standards, such as how to handle the common colds and flus in young children than can be harmful for seniors.
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Still, the legislation passed in large part because it addresses dual challenges facing rural Nebraska communities — reclaiming vacant space inside senior care centers and keeping young parents from moving away.
“We know that in order to attract people, one of the biggest things for young parents is finding reliable child care in their community,” said Jina Ragland, associate state director for advocacy and outreach with AARP of Nebraska, which advocated for the infrastructure grants. “So, I absolutely think that, moving forward as this pilot program grows, it could be part of creating economic development in our rural communities.”
In addition to funding, states such as Colorado and Oregon are clearing the way for local zoning changes that could help more child care centers open, such as reworking neighborhood parking rules to allow for more cars to drop off and pick up children near a new center, or reconsidering requirements that in-home child care centers install the same fire sprinkler system as a center in a commercial building.
Oregon convened a statewide task force to look for discrepancies in local and state-level zoning rules. For example, state rules allow 16 children in a family child care settings, but some local towns only allow 13 children. And Colorado created a planning grant program to encourage local governments to review and update their regulations to support the development of child care facilities.
“We heard from so many child care providers, who, if they hadn’t been determined on their own to open their centers, would have given up,” said Colorado Republican state Rep. Mary Bradfield, sponsor of the bipartisan bill that passed unanimously and was signed into law by Democratic Gov. Jared Polis in May 2024.
Colorado loses roughly $2.3 billion in economic activity each year due to lack of child care, according to the Council for a Strong America data.
The measure also provides construction grants and technical help for child care providers navigating local regulations, and it orders the Department of Local Affairs to develop a menu of policy tools that cities can use to make it easier for child care businesses to open and grow.
“People can easily get lost in the language of permits and regulations if they don’t have help from someone who knows what it entails,” Bradfield said.
Early evidence suggests this business-focused approach may be working. Vermont recently announced that, in the past year, 10 new centers have opened across the state, and licensed capacity in the system increased by 389 spaces, after the state awarded $20 million in infrastructure support to ready child care businesses for greater enrollment as the state rolled out increased subsidies for higher-income families in the fall of 2024.
In a recent survey of Vermont child care providers, only 5% of respondents said they thought they would close down within a year, compared with nearly 20% who’d predicted they would close when they took the survey two years earlier, before the state enacted the infrastructure and subsidy support changes.
‘A bit of a culture shock’
But state economic development agencies have faced challenges in supporting child care businesses. Unlike other recipients of aid, many owners of child care facilities have no experience with public financing, do not have access to bank loans and are not represented by attorneys.
Working with child care businesses has been “a bit of a culture shock,” said Cochran, of Business Oregon. To administer the first round of the infrastructure grants, the agency translated every piece of information about the grants into multiple languages, simplified its application forms, and funded a technical assistance center to answer questions from people who have not applied for public financing before.
The approach worked. For its first $10 million in grant awards, the agency received more than 700 applications for projects ranging from fixing a leaky roof to constructing a brand new center. The agency will make its awards decisions later this year, and advocates plan to request more funding in the future, given the volume of applications.
“We’re hoping that it’s something we can continue to offer, because even $50 million, it goes fast,” Cochran said.
Providing child care businesses with the same economic development support as the state provides to other priority sectors, such as technology or manufacturing, sends a powerful message that child care businesses and the people who operate them are valuable to their communities and economies.
“It’s a lot about changing our cultural values of thinking of [child care centers] as businesses, and not just something little that mostly women do on the side,” said Erin Roche, Vermont director of First Children’s Finance, which is helping the state administer its child care infrastructure grant program.
In Portland, Anna Pickel is building up enrollment in her new 82-seat licensed child care center, Happy Go Lucky Child Care, which finally opened in September 2024. She continues to use her experience expanding her center to advocate for the new infrastructure funds and address the state’s regulations to make it simpler for other people to grow their child care businesses.
“I was one of the few people that could speak to those challenges because it is my life,” Pickel said.
This story was originally published in Stateline, which is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity.