Family childcare homes have declined 48% since 2005 because licensing burdens crush solo providers who watch kids in their living rooms

Between 2005 and 2017, the number of licensed small family childcare homes in the U.S. fell by 48%, with over 90,000 small family childcare homes closing. In New York alone, home-based providers accounted for 83.9% of all provider losses and 87.2% of capacity losses between 2019 and 2021. As of 2024, only about 98,000 licensed family childcare programs remain nationwide, down from nearly 200,000 two decades ago. This collapse matters enormously because family childcare homes are the backbone of care in rural areas, serve nonstandard hours more often than centers, and are frequently the only culturally and linguistically matched option for immigrant families. The licensing burden on a solo family childcare provider — someone watching 4-6 children in their home — is disproportionate to their scale. They must pass the same background checks, complete the same training hours, meet building code inspections, maintain specific square footage per child, install commercial-grade safety equipment, and submit to unannounced inspections — all while earning a median income of roughly $25,000-$30,000 per year. Many states require 40+ hours of pre-service training and 15-24 hours of annual continuing education. For a single person running a home-based business with no administrative staff, the paperwork and compliance overhead alone can consume 10-15 hours per week that could otherwise be spent caring for children. The structural reason this persists is that licensing regulations are written for institutional settings and then awkwardly retrofitted for home-based care. Legislators and regulators face asymmetric political risk: if they loosen home-based licensing and a child is harmed, the political consequences are severe. If they maintain burdensome requirements and thousands of providers quietly close, there is no news cycle. The result is a regulatory ratchet that only tightens, steadily eliminating the most affordable, flexible, and community-embedded form of childcare in America.