Vermont Cut Its Childcare Gap, But the Housing Market Stopped Progress There
Vermont’s 2023 childcare investment is working, but only up to a point. Public funding under Act 76 helped existing programs survive and enabled new entrepreneurs to launch home-based childcare businesses. According to an analysis conducted by First Children’s Finance, the number of available childcare slots grew enough to reduce the statewide childcare gap by 19% over two years.
The housing market is now the ceiling on further progress.
19%
Reduction in Vermont’s childcare gap over two years, driven by 2023 public investment, but the number of home-based family childcare businesses has barely stabilized after a decade of decline. (First Children’s Finance, June 2026)
That 19% reduction is real. But Erin Roche, director of First Children’s Finance Vermont, writes that family childcare numbers have barely stabilized after ten years of decline, because entrepreneurs who want to open home-based programs cannot find or afford homes large enough to qualify under state licensing requirements.
Home-Based Childcare Providers Need Homes That Vermont Doesn’t Have
The connection between childcare and housing is structural, not coincidental. Home-based family childcare programs, which can serve up to six young children and four school-aged children per provider, require homes with adequate indoor space, outdoor space, and configurations that meet state licensing standards. Vermont’s homeowner vacancy rate sits at just 1.2%, well below what real estate economists consider a healthy market.
For a typical buyer, 1.2% vacancy means few options. For a childcare entrepreneur who needs extra rooms, a fenced yard, and square footage that clears a regulatory bar, the viable pool of properties is smaller still.
In rural Vermont communities, family childcare is often the only available option for working parents. These small, home-based programs fill gaps that commercial daycare centers never reach. When providers cannot secure adequate housing, those gaps stay open regardless of how much public money flows through Act 76.
Act 76 assumed providers already had homes. That assumption no longer holds in a market where housing instability is driving potential childcare entrepreneurs away before they can write a business plan.
What you can do now
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Call your Vermont state representative and senator through the Vermont Legislature’s district finder and tell them: “Vermont’s housing production goals should treat licensed home-based childcare providers as priority buyers or renters. Act 76 can’t work if providers can’t afford the homes they need to operate.”
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Contact the Vermont Agency of Human Services at (802) 241-0440 and ask whether the agency is coordinating with the Vermont Housing Finance Agency to create any preferential housing access or down-payment assistance for licensed family childcare providers.
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Contact your town or city planning commission and ask whether your local zoning code explicitly permits and supports home-based childcare licensing. Many local codes create unnecessary barriers by restricting square footage, outdoor enclosures, or signage that providers need to pass state inspections.
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Email your town selectboard or city council and ask them to pass a resolution supporting zoning reform for home-based childcare. Tell them: “Vermont needs more family childcare slots. Local zoning that blocks home-based providers makes the shortage worse.”
Sources
- Vermont’s childcare shortage is really a housing problem — VTDigger (2026-06-15)
VTDigger: Vermont’s Childcare Shortage Is Really a Housing Problem First Children’s Finance: Vermont Childcare Business Development Work Vermont Legislature: Act 76 Childcare Public Investment Law VTDigger: Vermont Housing Market Vacancy Rate Coverage Vermont Agency of Human Services: Child Development Division