Many American families struggle to afford housing as rents remain near record levels and the cost of buying a home is at an all-time high, but when you add in the high cost of childcare, it becomes even more challenging to pay for basic needs.
According to a Redfin report, families pay as much for daycare as they do for rent in some markets. In Denver, Seattle and San Francisco, families pay nearly as much for childcare as they do for rent because while housing is expensive in those places, so is childcare. San Francisco has the most expensive childcare in the country, followed by Seattle, Boston and Denver, according to Redfin.
In Denver, the average monthly cost of sending one child to daycare is $1,434, which is 83% of the typical rent payment of $1,720 in the metro area. Sending two kids to daycare in Denver costs 167% of the typical rent payment, or $2,867.
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Seattle is similarly expensive for childcare, with the average cost of sending one child to daycare at $1,660 or 80% of the typical rent payment of $2,065, and for two children is $2,320, or 160% of rent. Minneapolis ranked third in terms of high childcare costs relative to rent, with typical daycare costs of $1,186 equal to 78% of the typical rent of $1,526. Rounding out the top five are San Francisco at 74% of rent for one child and Baltimore at 71% of rent for one child in daycare.
Redfin based its analysis on childcare cost data from the Department of Labor and rents from its first-quarter median asking rent report. Childcare costs are rising year-over-year in 17 of the top 20 metro areas in the analysis, with the largest increases in Seattle, San Diego and Boston. Rents are rising in seven of the metros included in the analysis.
Rent and childcare costs eat up a significant portion of household income in many areas of the country. In Philadelphia, which falls in the middle for both rents and childcare costs, families spend about half of their income just on rent and childcare for one child. In Denver and Seattle, the percentage is closer to a third of the median household income, said Redfin.
“America has a housing affordability crisis—and it also has a childcare affordability crisis,” said Redfin chief economist Daryl Fairweather. “When the combination of housing and childcare costs take up such a huge chunk of household income, it strains budgets and puts a major burden on working families.”
Fairweather said this dynamic also exacerbates inequality, with many women deciding to leave the workforce or put career advancements on hold rather than pay for childcare. In addition, some Americans are choosing not to have children because they can’t afford it.
“Expanding access to more affordable childcare would go a long way toward easing the burden on young families,” said Fairweather.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
