Blame Overregulation for High Child Care Costs

Child care is expensive in New York City, and like the political snake-oil salesman that he is, Mayor Zohran Mamdani says he has a fix: The government will provide! We have yet to see a good explanation as to why child care should be the one service that government can offer cheaper and better than the marketplace, but Mamdani is a true-believing socialist who claims that everything is better when it’s run and portioned out by politicians. Inconveniently for him, researchers say the big barrier in New York to affordable care for kids is costly overregulation.

Addressing High Child Care Costs With Government Programs

“The cost of child care is pushing New Yorkers out of the city they call home—forcing parents to give up careers they fought for and to make impossible choices about whether they can afford to grow their families at all. That’s not an accident, it’s a policy failure. And it’s why this administration is moving with urgency to deliver universal child care,” Mamdani announced February 5 as he unveiled a city program to expand services for two- and three-year-olds on the way to his larger goal of government-run child care.

Mamdani isn’t alone. Worried about being outflanked by her party’s growing progressive caucus, Democratic New York Mayor Kathy Hochul has partnered with Mamdani and other political officials throughout the state to launch pilot child care programs funded by the taxpayers.

“As part of my plan to support every county statewide, this new pilot program will help counties develop and expand new models for providing child care for families, regardless of their income status,” Hochul boasted on January 14.

Hochul, Mamdani, and New York parents have reason to be concerned. According to a January 2025 report from New York City’s comptroller, in the city in 2024, “the average cost of child care for infants and toddlers in family-based care was $18,200, an increase of 79 percent since 2019,” while “the average cost of center-based care was $26,000, an increase of 43 percent since 2019.” That’s pricey.

Red Tape Burdens and High Costs Go Hand in Hand

However, the problem government officials are addressing is one of their own creation. Child care is so expensive largely because government red tape gets in the way, and New York is the second-worst state in the country for burdensome regulations.

“Childcare regulations aim to overcome information and measurement problems in the childcare market,” write Anna Claire Flowers and Vincent Geloso of the Archbridge Institute and Ricky Feir and Samuel Tipka of North Dakota State University’s Challey Institute for Global Innovation and Growth in the 2026 State Childcare Regulations Index, released last week. “However, state and federal regulations can have unintended consequences such as limiting supply, raising prices, and slowing new innovation.”

The authors look at state-imposed rules for child care facilities, “including child-to-staff ratio requirements by age, maximum group sizes by age, required annual training hours for staff, and minimum educational requirements for center directors and lead teachers.”

The five states with the least regulatory burden, according to the Archbridge report, are Idaho, South Carolina, Arizona, Alabama, and Florida; the five most bound by red tape are Vermont, New York, Pennsylvania, Maryland, and Massachusetts.

The Archbridge report doesn’t correlate the economic freedom of the child care market with costs across states. But in 2023, Move.org published a report drawing on data from the Economic Policy Institute and the U.S. Census Bureau that ranked states by cost and percentage of average income consumed by child care.

In the Move.org report, childcare cost $6,964 and 12.3 percent of income in Idaho, $6,507 and 12.5 percent in South Carolina, $9,748 and 17.6 percent in Arizona, $5,593 and 11.6 percent in Alabama, and $8,260 and 15.6 percent in Florida. For Vermont, child care came in at $12,265 and 20.3 percent, $13,876 and 21.3 percent in New York, $10,808 and 18.7 percent in Pennsylvania, $12,795 and 17.7 percent in Maryland, and $18,004 and 24.4 percent in Massachusetts.

Cut Costs by Cutting Red Tape

By and large, child care is more expensive in heavily regulated states, and paying for it consumes a greater share of the average family’s income. There are other factors in play, too, including good old supply and demand—lots of kids means more need for child care. Also, states aren’t always consistent in their application of regulations. Some are burdensome across the board, while others are generally laissez faire. But a few are a mixed bag, leaving providers and parents to navigate an unpredictable landscape for rules. Overall, red tape obviously plays a role in driving costs. So, how do you address that problem?

“There are two potential avenues to improving access to childcare for American families. One is to meet the higher prices and shortages resulting from increased barriers to entry with subsidies and state-sponsored programs,” note the authors of the Archbridge report. “The alternative path, and the path that involves addressing the drivers of high childcare prices, is regulatory reform.”

Some families and providers seek their own default “regulatory reform” by making informal arrangements and operating below the radar of intrusive bureaucrats. That’s not necessarily a violation, depending on local rules. In Arizona, child care facilities require licenses and are subject to regulation only if they care for five or more children. Even in jurisdictions where such arrangements are illegal, they usually work out just fine and draw attention only if they hit the headlines when a tragedy occurs through negligence or simple bad luck.

But the better route is real reform that reduces the regulatory burden so that more child care providers can offer their services and face fewer delays, legal hurdles, and costs while doing so. Like any other business, when child care operates aboveground it’s subject to greater scrutiny and accountability. Reduced red tape means greater competition to keep providers innovative and honest.

In New York, Mamdani and Hochul aren’t pursuing regulatory reform. Instead, they’re eager to insert government subsidies and programs into a situation where rules and regulations have made private providers unaffordable to many families. Having created the problem, they’re all too happy to offer a “solution” that will hide costs in rising tax bills and ignore the strangulation of the private child care market by red tape. Other states can and should do better.

The post Blame Overregulation for High Child Care Costs appeared first on Reason.com.

Source: https://reason.com/2026/02/11/blame-overregulation-for-high-child-care-costs/