In Some Small Towns, Childcare Centers are Becoming Engines of Economic Development

Some cities are turning underused commercial spaces or small homes into childcare centers, offering opportunities for multiple licensed family childcare providers to operate in one space, cutting costs. 

As Anne Vilen explains in The Daily Yonder, “States have different regulations for and even definitions of family childcare; many explicitly or implicitly require that family childcare providers live in the residence where they care for children.” Just seven states allow family childcare providers to operate in non-residential settings. 

Kansas is one of them, which has allowed creative forms of childcare centers — such as multi-business complexes and converted homes — to develop, bringing job opportunities and childcare options to residents. In Medicine Lodge, Kansas, “The Medicine Lodge Daycare flex-plex is a cluster of small, fully equipped childcare businesses in a mainstreet building” that offers spaces for five separate family childcare providers, allowing them to avoid the more onerous licensing requirements for childcare center administrators.  

In rural areas, there is a greater need for smaller childcare centers serving fewer clients in remote locations. “In Indiana, the Office of Early Childhood and Out-of-School Learning (OECOSL), streamlined its licensing categories to support a Micro-Facility Pilot program that launched in early 2025. Six existing childcare centers applied to open smaller satellites in rural or small town libraries, schools, and shopping centers.”