Best Practices to Support Child Care

Strategy: Create a local, sustainable public funding source dedicated to child care facilities

Description: Many Colorado counties, municipalities, and local marketing districts have created local funding sources through voter-approved or general funds which are dedicated to supporting child care. Voter-approved funding sources include lodging taxes, property taxes/mill levies, sales taxes, and nicotine/tobacco taxes.

Resources

• Buell Foundation Local Financing Toolkit
• Buell Foundation Local Financing Grants
• Buell Foundation Local Financing Case Studies
• Voter-Approved Children's Funds - Children's Funding Project
• In Madison, South Dakota, city leaders used Tax Increment Financing (TIF) to support child care: City leaders fund child care center with tax district typically used for roads, sewer - Route Fifty

Develop a program and/or dedicated funding source to subsidize or otherwise reduce local development review or impact fees for child care development

• New providers do not have any source of revenue until the facility is open and operating. Helping to reduce startup costs can help a provider with cash flow and long-term sustainability. This approach is often used to support other community priorities such as affordable housing.

Create a property tax credit or rebate program to incentivize property owners to create new child care facilities

SB 24-002 took effect in August 2024 and allows local governments to create property tax credits or rebates to support local priorities (including child care). For child care providers who own their facilities, reducing this operating expense can help to support the sustainability of child care businesses. For child care providers who lease space, creating property tax credits or rebates can help to incentivize property owners to lease to child care providers and may help to reduce some rent expenses

• Local Government Property Tax Exemption
• Activating Child Care Supply Solutions

• Revise local land use policies and regulations to incentivize the development or creation of child care facilities
  • Child care facilities can be a priority for planning efforts, and their creation often aligns with other critical community goals including the creation of family-friendly and/or walkable neighborhoods, workforce participation and economic development, and climate or emissions-reduction goals, among others. Access to child care is a key social determinant of health. Similar to access to health care, nutritious food, and safe, affordable housing, affordable child care plays a crucial role in a family's quality of life and overall well-being.
    • Family-Friendly Communities Briefing Papers 01: Child Care and Sustainable Community Development
    • Equity in Zoning Policy Guide
    • Policy Guide on the Provision of Child Care
• Establish a housing density and/or floor-area ratio bonus program specific to child care co-location
  • Density or floor-area ratio (FAR) bonuses can be an incentive to developers who are interested in increasing density beyond what is allowed by standard zoning regulations. There are some examples outside of Colorado of local governments using this tool to support child care.
    • Hartford, Connecticut developers can receive a Floor-Area Ratio (FAR) bonus in exchange for providing space for daycare. Reference: APA Policy Guide on the Provision of Child Care
    • In 2022, California passed Cal. Gov. Code § 65917.5 which allows local governments to offer a density bonus to the developer of a commercial or industrial project for the inclusion of a child care facility. Several local governments in California are utilizing this tool. Santa Rosa, CA, San Bernardino, CA, Gardena, CA, Arcata, CA, Oakland, CA, Coquitlam, CA
• Revise regulations to classify onsite child care for employees as a by-right or accessory use in commercial and employment-based zoning districts, with administrative review to waive the requirement for a public hearing.
  • Many employers are showing growing interest in providing on-site child care for employees, but some are located in areas where a child care use would require a special or conditional use permit, or would not be allowed at all. Onsite child care facilities are designed to serve primarily employees who work onsite, and many impacts and safety concerns are greatly reduced as a result. Allowing onsite child care through administrative review can reduce costs and help to encourage onsite child care facilities.
    • Employer Child Care Navigator
    • Feasibility and Assessment Guide
• Expand zone districts allowing child care facilities as a use-by-right (administrative review)
  • In many communities, child care facilities are a use-by-right only in commercial zones. However, they may be appropriate uses in other zone district types as well. Reviewing local codes for appropriate opportunities to expand the types of zone districts that allow child care through administrative review only can help to expand new possibilities for child care facility development.
    • White Plains, NY changed zoning to allow child care in office zones resulting in a 114-child facility in an office park
    • San Diego, California allows child care centers by right in all nonresidential zones
    • Prince George's County, Maryland has a special exception in zoning for child care facilities in excess public school buildings undergoing adaptive reuse
    • Palo Alto, California has a variance process for permitting expanded site coverage in industrial zones when the additional building space is used for child care
• Revise PUD approval and/or eligibility criteria to encourage the integration of child care facilities. Child care facilities provide a public benefit that may be used to justify a PUD zone district or overlay.  
  • Planned Unit Developments (PUD) are a type of flexible zoning that allows for the creative use of land in a specific area to meet community needs. PUD standards can include the demonstration of community benefit, such as the provision of child care facilities. Standards should be sufficiently specific, and in general conformity with the comprehensive plan.
• Modify zoning regulations to give weight to child care as a public benefit/public good
  • Local regulations may also consider public benefit/public good as a part of the approval criteria for various entitlement applications. Local governments can evaluate if/how child care is addressed in these regulations and consider whether there is an opportunity to support child care development in the community with modified regulations.
• Develop inclusionary child care ordinances
  • This strategy has not yet been used in Colorado. A local government may be able to adopt an ordinance that requires certain projects (e.g., of a certain size) to provide childcare facilities or a fee in lieu. This is similar to a dedication requirement (such as for parks, schools).
    • Boston has a zoning ordinance that requires the inclusion of child care in new development in 15 zone districts in the downtown area. The ordinance requires that buildings which create over 100,000 square feet of new floor space must 1) set aside a portion for a child care facility or 2) “cause such facilities to be built elsewhere in the city.”
• Adopt policies that require the inclusion of child care facilities in new developments. Consider implementing the requirement for annexations, new residential subdivisions, new commercial/office developments, and/or any other master or area planning processes for projects that exceed a locally determined threshold.
  • This would function similarly to an inclusionary ordinance, but would be for new annexations and/or subdivisions of a certain size. Note: except for annexations, local governments cannot require a dedication for childcare without offering a fee in lieu option (C.R.S. 29-20-203(1.5)).
• Create an overlay zone in child care desert areas that offer incentives for child care development
  • Incentives may include waived fees, grant funds, reduction of certain standards (e.g., parking, setbacks), administrative review, etc.
• Adopt policies that require child care opportunities as a part of dense/walkable communities
• Develop a child care needs assessment, action plan and implement policies to promote child care development, especially in business and walkable neighborhood centers
  • When creating large-scale community plans, including prioritizing the creation of dense or walkable communities, a community may consider the amenities that residents of these communities can access without having to drive. This can help to meet local and regional emissions-reduction goals by reducing the need for driving. When identifying these standards, local leaders can consider child care as a critical service that should be located proximate to housing in a walkable/dense community.
• Reduce parking requirements for child care facilities in local codes and/or promote shared parking agreements with child care facilities.
  • Many child care providers find that parking requirements impose a burden on the spaces in which they might operate. Child care facilities are unique in that they have a significant need for parking for about 2 hours a day (during typical pick up and drop off times) and then very minimal needs for parking the rest of the day. Local officials can evaluate the parking requirements, and through conversations with local providers about operations, may identify opportunities to reduce parking requirements and lessen this burden, making it easier to develop new child care facilities.
• Allow home-based child care services to be reviewed through an existing home occupation permit process.
  • Per 26.5-5-310(1)(b), local governments must not impose additional regulations on family child care homes (with a few exceptions) that don’t also apply to other residential properties. Since residential properties are subject, when applicable, to home occupation permits, home-based child care can use the same permit process, and avoid adding additional processes or regulations.
• Allow home-based child care within Planned Unit Development (PUD) zone districts and overlays.
  • Home-based child care is often overlooked when approving a Planned Unit Development (PUD) zone district or overlay for residential land uses. If home-based child care is allowed as an accessory use in other residential zone districts, while this use must be treated similarly to other residential uses per 26.5-5-310(1)(b), it can be encouraged by  including a provision in the PUD section of your zoning ordinance to clarify that accessory uses permitted in residential zones are also allowed in PUD zones or overlays.
• Align local rules and regulations, such as building codes or zoning codes, with state licensing requirements 
• Eliminate restrictive use-specific standards, such as requirements for outdoor space, parking, queueing distances, and designated drop-off and pick-up windows.
  • These factors are often already regulated and enforced through state licensing, with inspections conducted to ensure compliance. By removing these additional local standards, you can reduce unnecessary duplication of regulations. This approach also helps future-proof local regulations with broader state-level changes.

• Identify and implement opportunities to reduce regulatory barriers to the creation or expansion of home-based child care
• Create local rules for flexibility in the development of child care facilities
  • Child care providers, whether in centers or home-based settings, must navigate a variety of regulations, including state licensing, building codes, zoning codes, health codes, and fire codes. Each of these regulations adds complexity to the development of child care services, and in some cases, providers find that the requirements may even contradict one another. Local officials ultimately have the authority over many of these regulations, even when they fall under different departments. A comprehensive review of the various regulations and codes applicable to both in-home and center-based facilities can uncover redundancies and conflicts, which local officials can address to streamline the process and reduce burdens for providers.
• Establish an expedited development review process for child care facilities for both new construction and redevelopment projects.
  • Lengthy review processes can create significant expenses and loss of potential revenue for child care operators. Local officials could create an expedited process to help move child care facilities through the process more quickly, reducing their expenses and increasing the likelihood of a successful, sustainable project. This approach is often used to help support the development of affordable housing.
• Build flexibility into local architectural design standards for child care facilities
• Create a local flexibility and/or waiver process for change of occupancy/use resulting in increased child care availability
  • Local change of occupancy/use requirements can create financial burdens for child care providers. Local officials can examine opportunities to create flexibility and reduce upfront costs that may be faced by those seeking to build new child care facilities. For example, the local government can adopt an existing building reuse default option in the land use code where a building that has been vacant for a certain amount of time (e.g., 3 years) is automatically zoned to allow a child care center.
• Provide flexibility and incentivize home based child care through local rules and regulations
  • Colorado state law (26.5-5-310(1)(b)) requires home-based child care facilities to be treated as a residential use. Local officials can reduce burdens on child care providers by incorporating this law into code updates.
    • Local Officials - Implementing House Bill 21-1222 Factsheet

• Local governments can inventory publicly-owned buildings for suitable child care spaces and adopt policies for the use of vacant publicly owned real property for child care facility development
• Include vacant or underutilized property in the state’s vacant property inventory system managed by the department of personnel and administration
• Create a land donation, land acquisition, or land banking program that includes child care as an eligible use
  • In many Colorado communities, land is difficult and/or expensive to come by. Other times, potential providers may have difficulty identifying land that may be available for child care. By creating systems and policies for cataloging available land and making it clear that it could be utilized for child care (or, even better, identifying this as a priority use), child care providers can more easily get connected with opportunities to build new facilities.