Author: Frances Rosebush Baylor, Asset Funders Network
The United States’ child care crisis is stalling economic growth. Over half of U.S. families live in child care deserts, and states are losing billions in economic activity due to the lack of accessible, affordable care. A vital yet under-resourced part of the solution lies in home-based child care, which serves over 6 million children under age five, including nearly 30% of all infants and toddlers in non-parental care, and is powered almost exclusively by low- and moderate-income women.
AFN’s new brief, Supporting the Homes that Support the Economy, explores housing-based solutions to strengthen home-based child care and the crucial role philanthropy can play in driving them.
KEY STRATEGIES DISCUSSED IN THE BRIEF INCLUDE:
- Expanding access to flexible, affordable capital and technical assistance tailored to home-based child care providers as small business owners
- Expanding housing stock and accessibility for homebased care through developer incentives, Community Land Trusts, real estate management, and non-predatory rent-to-own models
- Investing in housing stabilization and improvements for home-based child care providers through grants, subsidies, and direct financial assistance measures
- Aligning local zoning, permitting, and housing policies to recognize and support the dual-use nature of provider homes
- Champion women-centered policies—such as paid family and medical leave and access to child care subsidies— that enable providers to thrive as both caregivers and entrepreneurs.
- Mobilizing philanthropic and public-sector leadership to co-invest in cross-sector initiatives that support home-based child care as a critical part of the child care ecosystem
6.4 million children ages 0 to 5 are currently being served by over 1 million paid home-based child care providers, and yet this is a fragile ecosystem.
“Everyone is just trying to have a better life, and they need a safe place for their child to go to. We provide that safe place, but the system makes it impossible for us to survive.—— Home-Based child care provider who participated in LISC’s 2025 In-Home Provider Focus Groups
As more than 90% of home-based child care providers are women, they face compounded challenges, including lack of access to paid family leave, limited eligibility for child care subsidies for their own children, and systemic barriers to housing and capital.
These barriers heighten housing instability, leaving many providers vulnerable to unaffordable rents, eviction, or foreclosure. Single mothers constitute a large share of the workforce relying on in-home informal child care, intensifying the ripple effects of provider housing insecurity on the families they serve.
Supporting housing affordability and stability for providers is essential to ensuring working families can rely on consistent child care.
The homes in which home-based child care providers operate are more than personal dwellings—they are community-serving small businesses, hubs of care, and essential services that allow families seeking flexible, affordable, culturally relevant care to participate in the workforce or education system.
Systemic underinvestment in housing, capital access, and policy support has driven a 48% decline in licensed home-based providers since 2010, threatening both care access and community stability.
This is a solvable problem.
Housing stability, affordable capital, supportive zoning, landlord/HOA and family policies, and opportunities for asset building are all critical to sustaining this sector. Every dollar invested in early care and education yields between $4-$12 in long-term returns through increased workforce participation, child development gains, and reduced public costs. To realize these returns, philanthropy and government must adopt a coordinated approach that bridges housing, economic development, and child care policy.
Barriers & Opportunities
Sustaining and growing the home-based child care industry requires coordinated public-private investments into the infrastructure and ecosystem of care, including supportive policies, sustainable public funding, comprehensive services, and access to affordable capital.
Home-based child care is not just care, it’s community infrastructure.
Philanthropy and government are uniquely positioned to align sectors and resources to invest in proven strategies to address home-based child care providers’ needs, fostering economic stability and enhancing providers’ critical role in our workforce and communities.
Supporting homes where care happens strengthens families, providers, and the broader economy.
Related Pieces
These related pieces build on Supporting the Homes that Support the Economy, offering funders and investors additional insights and strategies to translate research into action and impact.
