Across the nation, the consequences of a childcare shortage are dire. Women leave the workforce. Young families move away. Employers can’t find enough workers. The childcare providers who remain often leave the field for better-paying jobs, and those who stay may have to rely on public benefits to feed their own children.
Rural communities feel these pressures most acutely, as a report commissioned by United WE, a nonpartisan think tank in Missouri that focuses on women’s labor participation, explains. “Rural areas often have a limited supply of childcare providers. Smaller, dispersed populations make it difficult for programs to enroll enough children to remain financially viable. To break even, a typical childcare center needs approximately 150 children enrolled. In rural communities, however, lower population density makes it challenging to attract that level of enrollment, causing financial strain on providers. Additionally, recruiting and retaining qualified staff is difficult because wages are lower and professional opportunities are limited compared to urban areas” (p.16).
In the vacuum of new federal funding or comprehensive reform, some states are implementing their own novel solutions to address the shortage. First and foremost, rural states are making moves to strengthen the family childcare sector that families prefer, especially for infants and toddlers. Home-based providers care for more than 6 million children under age 5 nationwide. Many of these reforms mirror recommendations made by family childcare providers themselves in this report, published by Home Grown, a national funder collaborative that advocates for home-based childcare. Three broad strategies are showing particular promise.
Change Local Zoning Regulations to Match State Requirements for Family Childcare
When Shay Jackson, a social worker and new mother in Forsyth County, North Carolina, set out to open a family childcare home, she spent months completing the requirements for her initial license. Only afterward did she learn that county zoning rules required an additional $250 fee and a fence costing nearly $5,000. For many prospective providers, costs buried deep in city and county regulations that few are aware of become an insurmountable barrier to opening a licensed childcare facility.
Shelly Masur, Executive Vice President of the Low Income Investment Fund (LIIF), which counsels communities on capital solutions to local problems, notes that “local officials’ lack of understanding about how to work with childcare providers means [providers are] making multiple trips to City Hall. They’re filling out a variety of different forms. We heard from a provider in Georgia who waited outside city hall to basically ambush the mayor to ask for help navigating the city’s process, which she had been trying to do for almost a year.”
The labyrinth of state, city, and county ordinances often requires significant—and sometimes costly—renovations: widening driveways, adding exits, or installing new septic systems. Requirements vary so much that a provider who moves to another county within the same state may also need to engage in an entirely new licensing process.
In Washington state, many family childcare providers faced neighborhood-level barriers, as homeowners associations (HOAs) often banned home-based businesses due to concerns about traffic. Zoning regulations that hamper small childcare businesses fail to recognize that childcare is an essential community infrastructure worthy of the county’s investment, according to Carli Meek, program manager for The Imagine Institute, which mentors home-based childcare providers across Washington.
In 2023, the Washington family childcare providers union fought back, successfully pushing for a law preventing HOAs from prohibiting licensed family childcare homes. This change not only allows providers to operate in their own neighborhoods but also ensures families can find childcare closer to where they live.
Reviewing outdated, inconsistent regulations across states, counties, and municipalities is a crucial first step in modernizing policy, said Wendy Doyle, President and CEO of United WE. Doyle noted that after Kansas completed a full regulatory review in 2024, some communities streamlined their zoning codes to match the state’s requirements for family childcare homes.
Junction City, the county seat of rural Geary County and home to Fort Riley military base, estimated a need for more than 1500 additional childcare slots. Two months after the state updated its regulations, a local family childcare provider complained that she couldn’t comply with contradictory state and city statutes. Ultimately, the city eliminated its local zoning fees and aligned local statutes with state licensing requirements. For example, said city attorney Britain Stites, “Previously, we had a provision that you couldn’t provide childcare before eight and after five. There are a lot of shift workers here at the Michelin plant. We have a rail plant, and we also have physical training in the military that happens at 6 a.m., so we made sure to take that out. You always want policy and practice to meet, but sometimes the policy has to change to meet the practice, not just the practice to meet the policy.”
Michigan and California have also updated regulations to encourage zoning practices that support childcare in residential areas.
Finance and Support Credentialing that Speeds Caregivers’ Eligibility for a License
Most states require that providers obtain a college degree or a Child Development Associate (CDA) credential in order to be licensed as a family childcare home. For many caregivers, the coursework (typically 12 semester hours) to get a CDA is both expensive and time-consuming.
In rural Alaska, for example, where few communities have access to colleges and where many homes lack reliable internet, obtaining the credentials to get licensed can be especially onerous. Laura Norton-Cruz, an advocate and filmmaker whose work documents childcare challenges in rural Alaska, noted, a provider might have to fly hundreds of miles to Anchorage or Fairbanks multiple times a year at her own expense to complete the necessary coursework.
A childcare Task Force established in 2023 recommended allowing providers to demonstrate their expertise through alternative pathways that recognize a provider’s experience or “stacked certifications” from other required safety and child development trainings.
Alaska System for Early Education Development (SEED), which provides training and support for childcare providers across the state, now provides nearly all of its courses online. “More and more communities are using satellite internet, which has been opening up a lot of access, especially to professional development for rural and remote Alaska. The good news right now is that all of the professional development training through THREAD [Alaska’s childcare resource and referral network] has been free. That is also one of the recommendations of the task force,” said Stephanie Berglund, CEO of THREAD, which manages SEED.
Alaska also has a large indigenous population, and family childcare on tribal lands is regulated by tribal organizations with a focus on cultural relevance and traditional practices. This year SEED worked with the Sitka tribe “to design a program for them that they can run, to recruit and train and orient and support family childcare in their community,” said Berglund.
Washington has gone a step further by investing directly in pre-licensure training. The state’s Imagine Institute—funded through state dollars and private support—actually pays aspiring providers to attend required trainings, matches them with experienced mentors, and provides stipends to both the provider and the mentor over an eight-month period. “By matching them with an experienced mentor that speaks their language and is actually doing the work, it’s hands-on training,” said Carli Meek, who oversees the program.
Participants progress through monthly milestones and receive $20 per hour for up to 20 hours per month of training. By the fourth month, they submit their licensing application; by the eighth month, most are licensed and ready to open. Mentors receive $500 during training, and once the new provider is licensed and caring for a child receiving a state subsidy, both the mentor and the new provider receive a $4,000 award to reinvest in their programs.
In 2025, graduates of The Imagine Institute opened 198 new licensed family childcare businesses. Since 2018, 91% of the 865 family childcare providers who have completed the program remain in operation, caring for thousands of children across the state, according to Meek.
Boost Wages and Cut Costs for Home-Based Providers
Perhaps the most persistent challenge for rural family childcare providers is that early childhood education—caring for multiple children for 40 to 60 hours per week—simply does not pay a livable wage. After covering home maintenance, licensing fees, liability insurance, utilities, and food, family childcare providers often take home less than $15 per hour. In rural areas, where wages are already low, parents working in agriculture or manufacturing often cannot afford higher childcare fees, exacerbating the financial strain.
Some states are experimenting with new approaches to stabilize income. Missouri and Vermont have introduced childcare Contribution Tax Credits, allowing childcare providers to accept donations (not tied to services). Donors can deduct up to 75% of their contribution from their taxes—creating a powerful incentive for communities, chambers of commerce, universities, and employers to invest in local childcare.
Several rural communities are testing guaranteed-income programs that boost childcare wages. Kansas’s Baby Steps program provides quarterly stipends specifically to providers caring for infants, increasing availability where need is greatest. For the last few years, Alaska has awarded more than $3000 a year in wage stipends (called roots awards) to childcare workers registered with SEED, including licensed family childcare providers.
The Thriving Providers Project, developed by Home Grown has provided guaranteed income supplements to home-based caregivers in several states since 2022. The Thriving Provider Project works with regional partners to provide direct cash payments to Family, Friend and Neighbor (FFN) caregivers and newly licensed Family childcare (FCC) home-based providers. Supporting and stabilizing providers and caregivers improves the availability and quality of care for children and families.
Another novel approach to compensating providers more fairly and consistently is underway in Reno County, Kansas, which in 2021 fell 1800 slots short of childcare capacity, according to Heather Faulkner, executive director of Kids Collective. To address the low compensation of providers ($9.71 an hour in most centers), the county initiated its own quarterly retention stipend and added 400 slots in the last 18 months. “Through that process,” said Faulkner, “we collected a lot of data to figure out what the cost-of-care difference was in our community.”
Understanding how much it cost to provide care relative to how much providers were earning motivated Faulkner to establish Kids Collective, a 501(c)(3) nonprofit that now manages and employs more than 50 center-based childcare workers, at a wage of $15.51 an hour, plus health insurance and retirement benefits.
Kids Collective cannot employ licensed family childcare providers who own their businesses (who make up 70% of the childcare workforce in Reno County), but family childcare providers do continue to receive the retention bonus—more than $250 per child per quarter—plus an additional $800 per infant per quarter “because that was a place where we were really lacking capacity.” said Faulkner. Many childcare centers don’t accept infants; outside of parental care, home-based care is the most commonly used arrangement for infants and toddlers.
In addition, Kids Collective is reducing home-based providers’ costs by paying $15 an hour for attendance at Saturday trainings that focus on business practices like paying taxes and building a retirement plan, and welcoming them into the collective’s bulk-buying program, which reduces their costs for things like diapers, food, and materials. They are also advocating with the county for a property tax discount for family childcare providers.
Play Chess, Not Whack-a-Mole
While nascent local and state efforts to bolster the supply of family childcare in rural communities are promising, their impact so far is limited. Scaling these solutions so that they impact more families and more providers is critical, said Natalie Renew, executive director of Home Grown.
“We need policy changes that create coherence across local, state, and federal systems. We want childcare providers to spend most of their time caring for young children and creating exceptional learning experiences, so our solutions need to reduce—not increase—the burden on home-based providers,” she said.
“That means we need to outsmart this problem–play chess, not whack-a-mole. We need to think several moves ahead and invest in childcare as community infrastructure across all of America in order to make it available for all families, regardless of zipcode.”
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