More Than 130,000 Households With Housing Vouchers Have Been Burdened by Child Care Costs Since 2017

The United States is experiencing a housing affordability crisis and families with children are taking on the brunt of the burden. In 2021, the number of rent-burdened households—those spending more than 30 percent of their incomes on rent—reached an all-time high. At the same time, the country is experiencing child care shortages coupled with increasingly high costs for care, rendering many child care programs inaccessible to families. This is particularly problematic as housing and child care tend to be some of the highest line items in household budgets.

Historically, federal investments have offset the cost of housing and child care for families with low incomes through housing vouchers[1] and child care subsidies, including those funded through the Child Care and Development Fund (CCDF). Unfortunately, due to limited resources (e.g., insufficient supply of housing and child care subsidies to meet demand) and discriminatory practices in housing (e.g., discriminatory lending practices, redlining, displacement) and early care and education (e.g., inequities in access to affordable, high-quality care), housing and child care subsidies are not available to all families who are eligible. This comes at a significant cost to families with young children, as experiencing housing insecurity in early childhood can have long-lasting effects on children’s health, development, and well-being.

High-quality child care programs may be particularly beneficial to families receiving housing assistance. Child care programs not only support young children’s development, health, and well-being, but also provide critical respite for parents to attend education programs and participate in the labor force. However, the increasing expense of child care has put some parents in the position of making difficult choices, such as leaving the workforce.

While cost is only one facet of child care access, we do not currently have a clear understanding of the out-of-pocket costs spent on child care by families who receive housing vouchers. In this brief, we use administrative data from households across the country receiving a housing voucher to better understand their out-of-pocket child care costs. These data include county-level metrics on child care costs that may be useful for policymakers and practitioners interested in exploring opportunities to expand access to subsidized child care.

This brief is intended for child care and housing policymakers and practitioners who want to enhance access to subsidized child care for families. We first offer an overview of both the housing voucher and child care subsidy programs, followed by key findings from our administrative data analysis, including county- and state-level findings. We conclude with recommendations on enhancing access to subsidized child care for families who receive a housing voucher. Throughout the brief, we supplement our quantitative data with quotes from parents of young children who receive a housing voucher.

Interactive map: Exploring county-level differences in out-of-pocket child care costs among households that received a housing voucher and reported any out-of-pocket child care costs

The following interactive map can be used to explore county-level differences in the out-of-pocket child care costs of households with children under age 6 who receive housing vouchers and reported any out-of-pocket child care costs.

Key findings

Our findings illustrate that the number of households who receive housing vouchers and pay out-of-pocket child care costs is generally aligned with the number of families with incomes below 100 percent of the Federal Poverty Level who pay out-of-pocket child care costs. However, our findings also highlight that families with housing vouchers who pay out-of-pocket child care costs pay a significant portion of their income toward child care.

We also find that:

• From 2017 to 2022, more than 170,000 households who had a housing voucher reported out-of-pocket child care costs.
• More than three in four (more than 130,000) households with a housing voucher who paid for child care spent 7 percent or more of their income on child care.
• Among households that received a housing voucher and paid for child care, out-of-pocket costs varied by family income: Families with higher incomes were more likely than those with lower incomes to report out-of-pocket child care costs.
• Among households that received a housing voucher and paid for child care, those in which the head of household identified as Black and those with children under age 4 tended to pay significantly more in out-of-pocket child care costs.
• Out-of-pocket child care costs among families who received a housing voucher also varied dramatically by families’ geography.

Key recommendations

We also offer the following recommendations to state and local child care leaders, policymakers, public housing authorities, and child care professionals interested in increasing access to affordable child care for families who receive housing vouchers:

• Establish new—and improve existing—cross-sector collaborations between Public Housing Agencies (PHAs) and local child care leaders, including child care resource and referral centers. You can find contact information for your state or territory CCDF office here, and your local PHA here.
• Consider methods for streamlining families’ eligibility for housing vouchers and subsidized child care programs.
• Identify jurisdictions with limited access to affordable child care—and in which families use housing vouchers—and collaborate with local organizations to expand awareness of and access to affordable care in these neighborhoods.

Background

Housing and child care systems are impacted by racism, discrimination, and exclusionary practices that limit access to housing and child care financial assistance.

Both housing and child care systems are marked by long histories of systemic racism, discrimination, and exclusion that have made it challenging for some families to access these vital resources. In the United States, Black, American Indian or Alaska Native, Native Hawaiian and Pacific Islander, and Hispanic families face the greatest barriers in accessing safe, affordable, and accessible housing and the greatest rates of housing instability and homelessness. Discriminatory and exclusionary policies (e.g., racially restrictive covenants, exclusionary zoning) and practices (e.g., discriminatory lending practices, redlining, , displacement) have directly contributed to these inequities. Further, neighborhood segregation and  gentrification have also, in part, contributed to inequitable access to safe, stable, physically accessible, and affordable housing in the United States.

Discriminatory housing policies and practices have also led to differential access to child care. Community segregation and disinvestment limit access to high-quality child care in predominantly Black, American Indian and Alaska Native, and Hispanic communities. Additionally, young children are subject to racial biases while in care, with teachers demonstrating implicit biases and Black children being subject to greater disciplinary action (e.g., suspension and expulsion) in early learning programs.

Most families who receive subsidized housing through housing vouchers live in communities where households disproportionately experience poverty and limited access to high-quality education or employment prospects. Households receiving housing vouchers are also more likely to live in racially segregated communities (often as a result of structural policies and practices, including ongoing gentrification and barriers like the digital divide), which can directly affect families’ overall economic well-being—due, in part, to segregation’s effects on access to high-quality education, housing, and employment.

Housing vouchers, while limited in supply, play an important role in families’ economic well-being.

Housing vouchers are part of a federal rental assistance program that offsets the cost of housing on the private rental market for families with very low incomes (i.e., those that do not exceed 50% of the median household income for the area), individuals with disabilities, and individuals over age 62. Unlike development-based housing assistance programs, families who receive a housing voucher have the flexibility to identify housing on the private rental market. Housing vouchers are administered through PHAs—typically county- or municipal-level entities that oversee the provision of assisted housing programs—although housing voucher recipients are responsible for finding housing and landlords who accept their vouchers; the rental subsidy itself is paid directly to the landlord from the PHA. This is not always an easy task, as families often report discrimination based on their source of income (e.g., housing vouchers), despite laws to prevent this from happening. Families receiving housing vouchers pay approximately 30 percent of their income toward their housing costs, with the voucher covering the remaining costs. When determining family payments, PHAs may adjust families’ incomes by subtracting certain household expenditures, including child care, from their income determination.

Housing vouchers play an important role in increasing housing stability for households with children, improving child outcomes, reducing poverty, and increasing adults’ health and well-being. However, the demand for housing vouchers far exceeds their supply, and many families may wait years to receive a voucher while PHAs close wait lists due to incredibly limited resources. In most cases, families are eligible for housing vouchers if their incomes do not exceed 50 percent of their local area median income; however, PHAs must set aside 75 percent of their vouchers for families whose incomes do not exceed 30 percent of the local area median income.

Child care subsidies also play an important role in families’ economic well-being.

Child care subsidies are a vital resource for families with lower incomes (typically at or below 85% of state median income).[2] Child care subsidies are administered to families or child care programs through various federal, state, and local programs (e.g., the Child Care and Development Fund, or CCDF). Subsidy payment amounts vary across states and local communities, reflecting factors such as child care provider type (e.g., center or home-based), child age, and geographic location within the state. Eligibility criteria for child care subsidies also vary by state but, in general, children must be under age 13, household incomes must be at or below 85 percent of the state median income, and parents or caregivers must be employed or enrolled in a job training or education program. Families who receive a child care subsidy can enroll their children in any eligible child care program to receive the subsidy payment.

Families who receive a child care subsidy may also be required to provide a copayment. These copayments are determined after assessing household income, child age, and other relevant factors, and vary substantially from state to state. For example, according to an Urban Institute analysis, in 2016, a single-parent household with an income of $15,000 annually and two children ages 2 and 4 would not have a copayment responsibility in 17 states and territories but would be required to pay $1-$100 monthly in 29 states and territories and more than $101 a month in the remaining states and territories. In April 2024, the Improving Child Care Access, Affordability, and Stability in the Child Care and Development Fund (CCDF) Final Rule went into effect, which caps child care copayments for families who receive a child care subsidy at 7 percent of a family’s income.

As with housing vouchers, child care subsidies have been shown to increase maternal employment and support parents’ ability to work by alleviating the financial burden of child care. Child care subsidies also support parents’ educational attainment. Additionally, families who receive a child care subsidy are more likely to receive higher-quality care. Unfortunately—and also like housing vouchers—the demand for child care subsidies is much greater than the supply: Only 2 million children received child care subsidies in 2019, out of the 12.5 million who were eligible. Additionally, many parents report challenges with applying for child care subsidies and difficulty meeting eligibility criteria such as work requirements.

Housing and child care cost burdens can have significant effects on families’ economic well-being.

Housing costs (e.g., rent, mortgage, utilities) are generally some of the largest household expenses. Despite the resounding need for housing supports in light of the current housing crisis, rental assistance programs—including housing voucher programs—have limited resources and demand that exceeds supply. Additionally, housing costs are increasing at a much faster rate than wages, resulting in more families experiencing homelessness and housing stability. Almost one third of U.S. households are considered rent-burdened, paying more than 30 percent of their income on housing. Adding in child care costs can compound this burden.

The high cost of child care often correlates with its limited availability. Additionally, even with provisions in place to cap child care subsidy copayments, for many families—especially those with lower incomes—child care costs still consume a substantial portion of their household income. According to data from the National Survey of Early Care and Education, about 20 percent of households that have a child under age 5, use regular child care, and earn less than 100 percent of the Federal Poverty Level have spent 10 percent or more of their household income on child care costs. Reducing child care costs for families receiving a housing voucher can improve their economic well-being and their children’s access to high-quality care.

Findings

This section provides a brief overview of key findings on the demographic characteristics of families who received a housing voucher from 2017 to 2022, households’ out-of-pocket child care costs, the child care cost burden of families with out-of-pocket child care costs, inequities in cost burden, and the geographic distribution of these households.

Among the households in our analytical sample, the median annual household income was $14,962 (about 54% of the 2022 Federal Poverty Level for a household of four). More than half (58%) of the heads of households identified as Black and 17 percent identified as Hispanic.

Figure 1. More than half of heads of households with children under age 6 receiving housing vouchers identified as Black or Hispanic

Racial and ethnic composition of households with children under age 6 receiving housing vouchers

Data source: Households using housing vouchers with children under age 6 (n = 1,251,228) from the 2017-2022 HUD Family Report administrative data.

From 2017 to 2022, more than 170,000 households with children under age 6 receiving a housing voucher reported out-of-pocket child care costs.

Among households with children under age 6 that had a housing voucher from 2017 to 2022, 14 percent reported out-of-pocket child care costs; about 86 percent reported no child care costs. Due to limitations of the administrative data, we do not know how many of these households reported no child care costs because they did not use formal child care or because their child care costs were completely subsidized (e.g., they received a child care subsidy and did not have a copayment, or they were enrolled in a universal Pre-Kindergarten or Head Start program). In our sample, we know that 52 percent reported earned income—one facet of child care subsidy eligibility—although we do not know how many of these families applied for or received a subsidy, or whether their employment met each state’s respective threshold for employment eligibility.

Additionally, there is a relationship between household income and out-of-pocket child care costs. Analysis of nationally representative data from the National Survey of Early Care and Education (NSECE) indicates that almost three in four families (73%) with incomes below 100 percent of the Federal Poverty Level who used regular child care for at least one child under age 5 had no out-of-pocket child care costs in 2019. Unlike the NSECE analysis, we are unable to determine how many families in our sample used regular child care or solely relied on parental or informal child care. However, we anticipate that some portion of the families in our sample who reported no out-of-pocket costs were not using regular child care. Despite this fact, our analytic sample is still aligned with national estimates from the NSECE.

Over three quarters (or over 130,000) of households with a housing voucher who paid for child care spent 7 percent or more of their income on child care.

Among the 14 percent of households with children under age 6 receiving vouchers that reported out-of-pocket child care costs, the vast majority (79%) reported out-of-pocket child care expenses that were 7 percent or more of their household income (see Figure 2 below). This suggests that families with housing vouchers would benefit from access to subsidized child care, or increased subsidy amounts to help offset high out-of-pocket costs.

Figure 2. The majority of households with housing vouchers and children under age 6 who reported any out-of-pocket child care costs spent 7 percent or more of their income on child care

Child care cost burden of households with children under age 6

Data source: (a) Households with children under age 5 and income less than 100% of the Federal Poverty Level (n = 1,836,141) from the 2019 NSECE Household Survey. (b) Households with children under age 6 using housing vouchers (n = 1,251,228; median household income of sample is 54% of the Federal Poverty Level) from the 2017-2022 HUD Family Report administrative data.

Households’ out-of-pocket child care costs varied by household income.

Among housing voucher recipients, households that reported any out-of-pocket costs had higher incomes, on average (mean of $28,822), compared to those without any child care costs (mean of $16,215). This difference is likely due to varying eligibility criteria for subsidized child care, with family income and the number of children being factors in determining child care costs. Table 1 below shows a comparison of household income and the number of children in each age group between households with and without out-of-pocket child care payments.

Table 1. Comparison of households with and without out-of-pocket child care costs among households receiving a housing voucher and with children under age 6

Data source: Households with children under age 6 using housing vouchers (n = 1,251,228) from the 2017-2022 HUD Family Report administrative data. Household annual income was adjusted by Consumer Price Index to reflect their values in 2022 dollars.

There are persistent inequities in costs of care for households in which the head of household identifies as Black, and for households with children under age 4.

Among households with a housing voucher, we found that the racial and ethnic compositions of those reporting any out-of-pocket child care payments were similar to the overall sample of 1.25 million households using housing vouchers with children under age 6.

Figure 3. More than half of households with children under age 6 who had a housing voucher and reported out-of-pocket child care costs were Black

Racial and ethnic composition of households with children under age 6, receiving housing vouchers, and reporting any out-of-pocket child care costs

Data source: Households with children under age 6 using housing vouchers who reported any out-of-pocket child care costs (n = 173,940) from the 2017-2022 HUD Family Report administrative data.

However, among parents receiving housing vouchers who pay out-of-pocket child care costs, those who have a head of household who identifies as Black report paying a higher proportion of their incomes on child care (see Figure 4 below). A household with a head of household who identifies as Black, that has an average annual income of $28,822, and has one child under age 4 and one child ages 4 to 5 would pay $5,740 annually for child care. This is significantly higher than for households where the head of household does not identify as Black and that has children the same ages, who would pay $5,196 each year (p < 0.001).

Figure 4. Households in which the head of household identifies as Black with children under age 6, and which use a housing voucher, reported paying a higher proportion of their incomes on child care

Median percent of annual income spent on child care costs, among housing voucher recipients with children under age 6 who reported out-of-pocket child care costs, by race and ethnicity

Data source: Households with children under age 6 using housing vouchers who reported any out-of-pocket child care costs (n = 173,940) from the 2017-2022 HUD Family Report administrative data.

Households with the youngest children (under age 4) also reported higher out-of-pocket child care costs. A household with an average annual income of $28,822 and one child under age 4 would pay $5,326 annually for child care, significantly more than a household with the same income and one child ages 4 to 5, who would pay $5,144 (p < 0.01).

Out-of-pocket child care costs also varied dramatically by geography.

Both housing and child care systems operate locally, and our findings suggest dramatic differences in costs by geography. The percent of households with children under age 6 who paid any child care costs varied by state, ranging from 1.3 percent in Washington, DC to 21.8 percent in Alabama. Among those who paid out-of-pocket costs, households in Maryland, Nevada, South Carolina, Arkansas, and Louisiana reported the highest average out-of-pocket child care costs (adjusted by regional cost of living); households in Washington, DC, West Virginia, New Mexico, and Montana reported the lowest average out-of-pocket child care costs (see Table 2 below).

Table 2. Percent of households who receive a housing voucher and have a child under age 6 with any out-of-pocket child care costs and average annual out-of-pocket child care costs for households with children under age 6 receiving a housing voucher, by state

Data source: Households with children under age 6 using housing vouchers who reported any out-of-pocket child care costs (n = 173,940) from the 2017-2022 HUD Family Report administrative data.

Out-of-pocket child care costs also vary significantly by county. However, there are very few counties (3%) where no households reported spending 7 percent or more of their income on child care costs. For additional details on county-level data, please refer back to our county-level map—designed to provide information on costs coupled with county-level characteristics and child care policies.

Child care policies and practices vary considerably by state and locality and may be contributing to geographical differences in cost. While a full analysis of child care policy is outside of the scope of the current study, we hope to explore this in more detail in future work.

Study Limitations

There are a few notable limitations readers should be aware of when interpreting findings from the current analysis:

• We were unable to explore reasons why households reported no out-of-pocket child care costs. The majority of families who received housing vouchers from 2017 to 2022 reported no out-of-pocket child care costs. While this is aligned with other national estimates of the out-of-pocket child care costs of families with incomes below 100 percent of the Federal Poverty Level, we do not have adequate data to explore why families do not have any out-of-pocket costs. Families may not be using formal child care or may be receiving fully subsidized care. While we hope to explore this in future research, we were unable to do so in our current analysis.
• We were also unable to determine from our sample how many households with out-of-pocket costs also received subsidized care. Families in our sample may have a child care subsidy. Families who received a child care subsidy may still be required to provide a co-payment to their provider. Additionally, families may only have received subsidized care for a portion of their child care needs. Because families were not asked directly about child care subsidy receipt, we were unable to determine how many families in our sample received it.
• Due to small sample sizes, we are unable to report data on every county in the United States. While we can report county-specific data for 72 percent of counties, there are many jurisdictions for which there are very few families with young children who received a housing voucher. Because of data suppression standards, we are unable to report data from these counties.
• Administrative data are only available to explore cost, which is just one facet of child care access. Our current analysis is focused only on families’ out-of-pocket child care costs, despite families considering many other factors when exploring child care options. In future studies, we plan to explore other dimensions of access alongside the child care needs and preferences of families who receive a housing voucher.

Conclusions and Recommendations

Understanding the out-of-pocket child care costs for families using housing vouchers is an important pathway for increasing equitable access to child care, largely by helping us identify pathways to increase access to more affordable care. While 86 percent of households receiving housing vouchers reported no formal child care costs from 2017 to 2022, the vast majority (79%) of those who did have out-of-pocket child care costs spent 7 percent or more of their income on child care. This suggests opportunities to increase access to subsidized child care for families who receive a housing voucher—thereby bolstering families’ economic well-being via more pathways to stable, high-quality child care.

The following recommendations are for state and local child care leaders, policymakers, public housing agencies, and child care professionals interested in increasing access to affordable child care for families who receive housing vouchers:

Establish new—and improve existing—cross-sector collaborations between PHAs and local child care leaders, including child care resource and referral centers. Developing cross-sector partnerships and collaborations can increase access to subsidized child care, including child care subsidies, Early Head Start and Head Start, and state-/locally funded pre-K programs. Cross-sector partnerships provide enhanced opportunities to share information about child care subsidy eligibility and processes and offer a pathway for PHA staff to refer families to subsidized care. Additionally, there are innovative examples of programs (e.g., A Head Start on Housing in Connecticut) that connect families enrolled in Head Start with housing vouchers.

You can find contact information for your state or territory CCDF office here, and your local PHA here.

Consider methods for streamlining families’ eligibility for housing voucher and subsidized child care programs. Opportunities may exist through shared enrollment applications and/or data sharing between PHAs and local child care subsidy systems. Additionally, there may be opportunities to explore categorical eligibility for subsidized child care programs based on receipt of a housing voucher. For example, children experiencing homelessness are categorically eligible for Head Start programs.

Identify jurisdictions with limited access to affordable child care near communities—and in which families use housing vouchers—and collaborate with local organizations to expand awareness of and access to affordable care in these neighborhoods. Using tools like our interactive map can help identify inequities in access to child care in communities where families use housing vouchers. Look for opportunities to work with local policymakers, developers, and funders to expand affordable, high-quality child care options in these communities.

Footnotes

[1] Throughout this brief, we interchangeably refer to Housing Choice Vouchers, Section 8 Housing Vouchers and Certificates, and Moving To Work Vouchers using the broader term “housing vouchers”.

[2] Child care subsidy policies vary by state, including specific income-based eligibility requirements. Typically, families whose incomes are at or below 85 percent of the state median income are eligible for a child care subsidy.