The New York City Council is urging the Adams administration to reverse $1 billion in planned budget cuts, including $170 million in funding for early childhood education that lawmakers say is crucial for young families.
Lawmakers warn that any rollbacks to the city’s 3-K and pre-K program, which provides free education for 3- and 4-year-olds, will worsen the city’s child care crisis and drive more middle-class New Yorkers to leave as housing and food prices also skyrocket.
Child care is already unaffordable for 80% of New York City families, according to child care experts.
The 80th percentile of families pay between $14,000 and $20,000 a year for care for a child 5 years old or younger, reports show. A family earning $86,000 could spend a quarter of their salary on care for an infant or toddler, which blows past federal standards that say child care should not cost more than 7% of a household's income. Meanwhile, about a quarter of child care workers live in poverty, reports show, and some neighborhoods have fewer child care options since many closed after the pandemic.
“The way that we price child care actually has nothing to do with what the cost of it is,” said Lauren Melodia, deputy director of economic and fiscal policies at the New School's Center for New York City Affairs. “Parents can't afford the market rate and providers also can't afford to work at the market rate. So there's this gap that really needs to be filled by public investment.”
Gothamist spoke to child care experts across the state and six early childhood education providers across the five boroughs to understand why families are paying so much for care. They said the long-term fix is to move toward universal child care, which is why fighting to keep 3-K expansion is crucial.
Why does child care cost so much?
Child care facilities are tightly regulated.
There are rules governing how many children can be in a room, how much square footage is required for each child, and the ratio of adults and caregivers to children. For childcare facilities based in a home, there has to be at least one caregiver for every eight children with a maximum of two infants. That makes staffing a major expense for providers.
But even though more staff are needed for fewer children, these early childhood education programs are not subsidized in the same way that public K-12 schooling is.
“A lot of our child care challenges, the shortage of care, the lack of affordability of care, all these things are rooted in a decision that we've made as a country to not treat child care like a public good,” said Pete Nabozny, director of policy at the Children's Agenda.
“We don't treat it the same way that we treat the education system. This has been a real challenge for many decades, but it keeps on getting more severe of a problem for families and we seem to be sort of reaching some kind of breaking point,” he said.
Families can expect to pay about $20,000 a year for center-based childcare for infants and toddlers.
What are the types of child care programs? And are some more expensive than others?
Center-based child care programs operate out of commercial spaces, while home-based or group-family care programs are run out of private residences. Home-based programs can’t have more than eight children while group-family programs can have as many 16 kids.
Providers say child care programs based in homes often offer families more flexibility, such as non-traditional hours, locations closer to where they live or work, and more spots for infants.
In general, home child care programs are less expensive than center-based care. Rates for infant care are more costly than for older children due to lower staffing ratios.
“Since there's very, very few slots for infants and toddlers, there's usually not a choice for families looking for infant and toddler care because they only have home base as an option,” said Nina Piros, senior early childhood director at Grand Street Settlement, which runs center-based programs in Manhattan and Brooklyn.
She said center-based providers need to have at least 30 square feet per child, which also adds to costs.
Are there price differences by neighborhood?
Providers say they can only charge what their community can afford and in lower-or middle-income neighborhoods that’s not always enough to cover their operating costs, particularly for home child care businesses. For example, programs in Castle Hill or other parts of the Bronx can't charge what a program in Riverdale does.
“If a parent just got a job, say they just started a job at Costco, Walmart or something like that, you think they're going to be able to afford $450 [a week] for child care?,” said Andrea Davilar, a group-family provider in St. Albans, Queens.
Families in Brooklyn and the Bronx are the most cost-burdened and pay a higher percentage of their incomes toward child care, according to a report by the Citizens’ Committee for Children of New York.
The report found that households in Mott Haven and Hunts Point in the Bronx spent as much as 63% of their income on infant and toddler care and just 0.4% of families could afford it, based on federal affordability standards. But the problem doesn’t just affect low-income areas. According to the report, there are only two community districts in the entire city where a large majority of families can afford infant and toddler care: Greenwich Village and Tribeca.
“When you think about the cost of care and the cost of housing in New York City, it really is this incredible affordability crisis conundrum,” said Jennifer March, executive director of the Citizens’ Committee for Children of New York.
There are also 14 community districts that are considered child care deserts, meaning there are three or more children for every available child care seat, according to a 2023 report by the Center for New York City Affairs. That primarily includes parts of Staten Island, Brooklyn and Queens.
Some of New York City's wealthiest neighborhoods can afford childcare.
What is the most costly budget item for child care providers?
Staffing.
“Our budget, about 80% is salary and fringe,” said Willing Chin-Ma, chief operating officer for Grand Street Settlement. “The fringe includes the payroll and includes the health insurance, and we want to be competitive so we have a 401k.”
Child care providers who operate out of their homes said paying for an assistant also absorbs most of their earnings, even though they largely pay minimum wage. Home-based providers said they pay their staff first, and even though they can’t afford to offer benefits, that usually means there isn’t enough left over for them to earn a salary.
“I'm in this business not because of what I earned, but because of the generosity of my husband. He has carried the bills, because if it was me, I'd be in the poorhouse,” said Doris Irizarry, a group-family provider in Castle Hill in the Bronx and co-founder of ECE on the Move, an organization of early childhood educators. She said she needs the money to cover her mortgage, her utility bills, workers comp, and supplies for the children.
The Center for NYC Affairs found that the median home-based provider made about $10.61 per hour in 2021.
Is this problem worse in New York City than elsewhere?
While child care affordability is a national problem, providers said New York City’s cost of living makes it even harder for both parents and child care educators.
“Real estate is driving the cost. The cost of paying for rent is outrageous,” Chin-Ma said of commercial rents for center-based providers.
Providers who run programs out of their homes and pay rent also have to grapple with rising New York City rents.
Jerika Espinoza runs a group-family — a program run out of her home that can serve up to 16 children — on Staten Island and said her take-home pay has remained the same even as costs for food, materials and utilities have jumped.
“We used to make $3 an hour for children, that’s not enough money to pay payroll, rent, internet, cable, you need to get disability,” she said. Espinoza added that she can’t charge more for her program because families can’t afford it.
Meanwhile, she said providers like her, who have been in the business for 20 or more years, don't have pensions, retirement funds or health insurance.
A map of childcare deserts in New York City shows a need in Brooklyn and parts of Queens.
How does the cost of care affect staffing levels?
Providers said there’s a staffing shortage and retention issue in the child care sector, which makes it harder for operators to keep their doors open. There’s also an issue of pay parity as center-based providers compete with the Department of Education’s 3-K and pre-K programs, which can pay staff more for the same qualifications.
Home-based and group-family providers are also moving on to more sustainable jobs that allow them to build a retirement savings plan or obtain health insurance.
“That's why a lot of providers left this industry, they went to do home [health] care,” Irizarry from the Bronx said. “Homecare is paying $22 an hour and all the benefits, vacations and everything else. They get health insurance, they get vacation pay, holiday pay. We can't afford that. That's why a lot of them leave.”
Child care workers are disproportionately women and women of color, according to the 5Boro Institute, the think tank. The report said more than half of child care workers earn incomes low enough that they qualify for public benefits and child care subsidies for their own children.
home-based providers are the lowest paid childcare providers.
What are families paying for?
Providers said they wear many hats as they care for the youngest New Yorkers.
“We're not just we're not just teaching the kids, we're we're providing meals for them, we're cooking daily, we're doing diaper changes, we're teaching them how to use the potty,” Davilar said.
Piros said some child care centers also work with families to get them involved and understand their needs.
“Children need to be in settings with all these children so that they can enhance their social skills, enhance the language skills, enhance their learning and cognitive skills,” she said so that they can be prepared for kindergarten and beyond.
What about subsidy programs, do those help?
Families who can’t afford care may be eligible for a voucher to cover part of the cost. Families who earn below certain income levels, are homeless or receive cash assistance can be eligible. The child must be a U.S. citizen or have legal immigration status to qualify.
But providers say the rates of reimbursements don’t cover the full cost of care. The state sets the reimbursement rates through a market-rate survey every three years and recently slightly increased the rate, but Melodia said it’s a flawed methodology that doesn’t take the actual cost of what it takes to operate a facility into account.
“We're all kind of linked into this system where we're reinforcing these payment rates that don't cover the cost of care,” Melodia said. “We're asking people to take a cut to take care of low-income families.”
How can we solve this problem?
Child care experts say the city and state need to move toward universal child care. The City Council passed a bill last year that creates an advisory board to figure out how to get to universal child care within five years.
“We shouldn't expect that the price is going to go down because we should actually expect that if we want high-quality care, we're going to have to pay for it,” Melodia said.
“There's plenty of evidence that it shouldn't be a cost that households have to bear on their own and that there should be real concerted effort by the government, by all the layers of the government to figure out how to fill that gap,” she said.
Correction: A previous version of this story misstated the name of the chief operating officer for Grand Street Settlement. It's Willing Chin-Ma.
