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How Co-Location Strategies Support High-Quality Child Care and Strong Communities

Written by Marnagee Scott

Earlier this year, LIIF released a white paper, Building Better for Families: Policy Strategies for the Co-Location of Early Care and Education Facilities and Affordable Housing, that explored the benefits and challenges of co-locating early care and education (ECE) facilities with affordable housing and highlighted potential policy solutions to support these projects. To expand on this work, LIIF is publishing a series of blogs that feature interviews with ECE providers who operate child care programs in co-located spaces.

In the series you will read providers’ perspectives on the benefits this strategy provides to their community and business. We will explore challenges providers face when attempting to secure a space for their programs and how co-locating with the assistance of Community Development Financial Institutions (CDFIs) can ease the complexity of the process.

First in our series, we connect with operators who detail how the holistic community development approach expands child care access for families with limited wealth and generates broader community benefits like creating jobs and fostering  collaborative and supportive local communities.

Why Providers are Interested in Co-Located ECE Programs

The four ECE leaders we interviewed expressed a strong desire to increase equitable access to child care in their communities and expand into neighborhoods with inadequate child care services for families with limited incomes. However, expansion projects are extremely costly and time intensive, so providers must be innovative in their approach to locating ECE facilities that allow them to both afford the space and deliver care to families with limited incomes. Co-location often offers opportunities to meet both those goals. Through local policies or partnerships, providers were able to partner or negotiate with other public or private stakeholders to receive below market rent for the ECE space co-located in the development, and rent concessions were often the single most influential reason they were able to lease a co-located space. By alleviating some of the financial and operational burdens associated with opening or expanding a business, providers say they can serve more children and families with limited incomes, access state-of-the-art physical spaces, and provide more holistic programming support for the entire family.

Felton Institute, Mission Neighborhood, San Francisco

Rooted in equity, Felton’s mission is to transform quality of life and promote social justice to accelerate community-led change. Felton has been working with communities for 133 years to address systemic inequities. Community members shared that accessing housing is their number one challenge, so Felton Institute is currently working with developers to co-locate ECE programs in affordable housing developments with plans to open in spring 2022 and fall 2024. Via a competitive request for proposals, Felton was selected as the onsite operator for Casa Adelante (the development planned to open in spring 2022). Casa Adelante is an eight-story, 143-unit 100% affordable rental housing development for families in the Mission District. The project will also have two units reserved for family child care providers and an ECE center – Felton’s Solmar Learning Center. The project aims to promote the development of permanent affordable housing for low-income households in San Francisco that is consistent with the 2015 voter-approved General Obligation Housing Bond (Proposition A), as well as the City’s Consolidated Plan, Master Plan Housing Element, and the 10-Year Plan to Abolish Chronic Homelessness. To guarantee historically underserved populations have equitable access to the new facilities, residents of the affordable housing developments will be prioritized first, followed by residents within the ZIP code.

Dr. Yohana Quiroz, Chief Operations Officer at Felton Institute, shared that Felton is committed to addressing the community’s most pressing needs—housing and child care—to support families on a pathway to economic mobility and improved health outcomes. At Felton, they focus on integrating culturally relevant aspects of the surrounding community into their centers. The Mission District neighborhood is 39% Latino and a significant number of the children served by Felton come from non-English speaking immigrant households. To promote an inclusive learning environment, Felton recruits bilingual and bicultural staff who are reflective of the community. In ECE programs co-located with affordable housing, this may mean staff live in the same building as the children and families being served. This approach not only provides job opportunities to residents of the building, but also allows children to view their teachers as leaders and trusted community members.

Still, Yohana emphasized the importance of incentives and funding sources to ensure these projects can come together. Using city funding, LIIF provided a $2 million grant to help finance the co-located ECE center, and Felton secured an additional $500,000 to fill the remaining gap. Without funding and incentives, Yohana noted that these developments are often not financially feasible for nonprofit organizations.

The Telegraph Hill Neighborhood Center, Mission Bay Neighborhood, San Francisco

The Telegraph Hill “TEL HI Neighborhood Center” Mission Bay Child Care Center in San Francisco recently opened a new child care program co-located with Uber’s new corporate office space. In San Francisco, a local child care impact fee policy requires new building developments over 50,000 square feet to either pay into the San Francisco child care impact fund or build a nonprofit child care center that contributes to meeting the city’s child care infrastructure needs. Uber chose to build onsite child care in their new development rather than pay the local child care impact fee. TEL HI Neighborhood Center won a competitive application process and was selected as the onsite operator, where they are able to operate rent-free. LIIF provided start-up grant funding, which supported staff salaries, office equipment, staff recruitment, and other curriculum and teaching materials.

Nestor L. Fernandez II, CEO of TEL HI Neighborhood Center, said it is challenging to identify viable development options in urban areas where space is so constrained, and that the opportunity to co-locate with the new Uber corporate office development presented an incredible opportunity to expand into a new facility and serve a neighborhood that has been rapidly gentrifying. The Mission Bay neighborhood has undergone extreme demographic shifts over the last decade. The total population doubled between 2010 and 2020, and there was an 88% increase in the White and Asian population between 2010-2016. Still, poverty rates in Mission Bay’s three surrounding neighborhoods range from 9% to 27%. Given these ongoing demographic shifts, TEL HI Neighborhood Center advocated for equitable access to the new facility to ensure families with fewer resources from surrounding neighborhoods can access the center, rather than prioritizing access for Uber employees or only accepting families who can pay full tuition. The San Francisco building code requires that at least 10% of the enrollment at TEL HI Neighborhood Center is reserved for low-income families. Subsidized tuition offers an opportunity for longtime residents to have equitable access to the new amenities in their community.

Little Scholars Early Development Center, Bronx, N.Y.

Jasmin Corniel, the founder of Little Scholars Early Development Center, launched three co-located child care centers with affordable housing developments in the Bronx. These centers serve a total of 300 children from ages birth to 15. The centers are located in severely underserved communities with some of the highest rates of child poverty in the country. Jasmin navigated her first co-located development over a decade ago and noted that this first space was incredibly challenging because she was “out there on her own.” Since then, LIIF has partnered with Jasmin to provide technical and financial assistance, which she says has been critical as her financial needs and requirements grew substantially after expanding her business.

Throughout the interview, Jasmin emphasized the importance of negotiating with developers for lower than market rate rent in order to offset the financial costs associated with developing a co-located center in New York City. Although negotiations are time intensive and challenging, she said it was essential to her success. Market rate rents would have been an unrealistic option for her program.

KU Kids Deanwood, Washington, D.C.

In Washington D.C., KU Kids was able to access space within the Deanwood Community Center as part of Mayor Bowser’s Quality Child Care Initiative, which seeks to increase investments in affordable child care services throughout low-income neighborhoods in the district. As part of this initiative, the mayor identified three sites in District-owned buildings to open or expand quality child care programs. The Deanwood Community Center is in Ward 7, a neighborhood that is 92% Black and has a poverty rate of 26%. The community center has a library, football field, gym, multi-purpose rooms and a pool. KU Kids takes advantage of these resources by having children attend story time at the center’s library and using the football field for outdoor activities and events on special occasions like Parents’ Day Out or holiday celebrations. Cassandra Nelson, CEO of KU Kids, shared that access to the broader amenities and activities at the community center is a significant benefit for her program. These opportunities for holistic programming can increase family engagement and help coordinate service delivery for the whole family, which may be particularly beneficial in neighborhoods where residents have historically lacked or had limited access to critical services.

Cassandra noted that one of the main attractions of the community center space was the opportunity to operate her program without having to pay traditional rent. Because of the rental concession from the city and a grant from LIIF to renovate the program space, tuition for the program is significantly lower, allowing access to families who could not afford to enroll in the two KU Kids program locations in more affluent areas of the city. Cassandra stressed that government stakeholders should ensure ECE providers have access to co-located opportunities, because market rate rent is simply not economically feasible. In the future, Cassandra shared that any additional ECE programs she opens will hopefully be within a co-located space because it has allowed her to expand affordable care options to more families with limited income.

Finally, the four providers noted that working with partners across different asset classes – like affordable housing or corporate office space – brought certain environmental and design standards to the development process that were incorporated in the design and construction of the ECE program space as well. High-quality ECE facilities are proven to support child health and development, as well as teacher health and safety. However, many ECE programs operate from substandard spaces, like basements, because they are the only facilities providers can afford. These physical spaces have a significant impact on the quality of a program, yet it is often infeasible for providers to access higher quality spaces without financial and technical support. Co-locating ECE programs with other community amenities can help ensure quality and environmentally friendly design and construction techniques are prioritized.


LIIF’s conversations with ECE providers in California, New York, and Washington D.C demonstrated a deep interest in the co-location model and a desire to expand opportunities for future co-located developments. In addition to supporting the provider’s own business expansion and alleviating financial challenges through incentives, providers spoke passionately about the far-reaching benefits for the children and families they serve. Co-locating child care with community developments is an innovative approach that can address several challenges in our nation’s child care industry. However, there are still many financial and technical challenges to the co-location process, and additional work is needed to help providers access these opportunities without undue burden.

Next in the series, we will highlight local policy recommendations that support providers looking to co-locate their programs within community developments. These are the strategies needed to fill the gaps in access to quality child care options.

Marnagee Scott serves as the ECE Policy Intern with the Low Income Investment Fund. Marnagee received a bachelor’s in Political Science from the University of Georgia and is currently pursuing a master’s of Public Administration from the University of Georgia.