How to Make Daycare, Healthcare, and Housing Cheaper: An Abundance Playbook
A running list of state and local rules that raise prices on the biggest line items in a family budget, and what to do about them.
I keep hearing that abundance is a nice idea but it doesn’t help families who are struggling today. So I made a list.
These are state and local rules that make life more expensive than it needs to be. I started with childcare, healthcare, and housing because that’s where much of a family’s money goes.
Nobody wrote these rules to hurt families. Most were enacted for real reasons. But many haven't been updated in decades. The costs add up.
Every item on this list can be changed without new subsidies or government spending programs.
CHILDCARE
Nearly 70% of parents spend a fifth of their income on childcare. Federal subsidies are unlikely under this administration. State and city budgets usually can’t cover the gap.
But costs can come down.
Zoning bans formal daycare centers in most residential neighborhoods. This limits supply and raises prices. Even where zoning allows them, approval takes years and costs tens of thousands. One California daycare center tried to expand from 14 to 48 spots. Neighbors fought it for four years.
In-home daycares are often the most affordable option for families, but they’re underground and hard to find. About 90% of paid childcare settings are in-home daycares — someone caring for kids in the house or apartment where they already live. Roughly 85% of these are part of the underground economy, partly because requirements to run one legally are expensive and confusing. Licensing fees, occupancy permits, inspection rules add up fast. Reducing these costs would bring the most common form of childcare in America out of the shadows.
In-home daycares are also often banned because of zoning and HOA rules. Most states allow in-home daycares. But cities and HOAs ban them in practice, because zoning treats watching kids for pay as a commercial use of the home you live in. Some require a conditional use permit, which neighbors can block. California recently classified in-home daycares of up to 12 kids as a normal residential use. HOAs and zoning boards can’t block them.
Staff-to-child ratios vary wildly across states for older kids; the strictest ones raise costs without a clear evidence behind them. For older preschoolers, North Dakota caps it at seven kids per caregiver. North Carolina and Florida allow twenty. The most permissive states allow nearly three times the children per staffer, which means more revenue per employee and lower tuition for parents. Many states set ratios stricter than what the National Association for the Education of Young Children recommends. Researchers disagree on whether the strictest ratios meaningfully improve outcomes, but the impact on cost and supply is large.
Supervision and ratios often don’t account for flow during the day. While it makes sense to require a staff member for 6 toddlers when they are awake, some states (like Texas and Iowa) allow one staff member to supervise 12 napping kids so the other staff member can have lunch. In some states, daycares end up having to hire a floater to cover breaks so that two staff sit in a darkened nap room.
Strict age-group rules force providers to hold spots empty. Most states ban mixing age groups e.g. no three-year-olds with eighteen-month-olds, even briefly. When ages do mix, the ratio for the youngest child applies to everyone. Providers may need to keep spots open and not generating income to make this work. Even when parents feel their younger kids are ready to move up early, it is illegal. This also increases labor costs. To break even, small providers likely end up breaking this rule despite the legal risk.
Daycares can’t operate above the ground floor in most states. Moving upstairs could cut occupancy costs by up to 50% in high cost cities. Occupancy is the second biggest daycare expense after labor, at 10-20% of operating costs. Ground-floor commercial space is the priciest real estate. The bans stems from evacuation concerns, but NICUs operate on upper floors of hospitals. Modern fire safety, like sprinklers, and staff training have solved this concern. Most countries allow second-floor daycares.
Degree requirements price out good providers. Some states require college degrees for non-managerial daycare workers. This raises costs, on both workers and families, without clear benefits.
None of these reforms will make childcare cheap. Only government support for parents can do that. But they can make it cheaper, and they can do it now.
HEALTHCARE
Pharmacists can’t prescribe for common conditions in most states. Thirty states allow pharmacists to prescribe birth control. Only California, Idaho, and New Mexico allow pharmacists to prescribe medications for minor health problems like pink eye, cold sores, urinary tract infections, yeast infections, and minor skin conditions. Pharmacies are everywhere. Doctors’ offices often aren’t.
Dental therapists, i.e. mid-level providers who do fillings and extractions, are illegal in most states. Minnesota legalized them. Rural and low-income communities got meaningfully more care and cheaper care. The ADA fights these laws everywhere. They argue everyone deserves a full dentist. But cost keeps millions of Americans from seeing any dental provider at all. Also, dental therapists work under the supervision of a dentist.
Nurse practitioners and physician assistants can’t open their own clinics in many states. They can do most of what primary care doctors do. Twenty-nine states allow experienced nurse practioners to open their own practice. Only six states allow physician assistants to practice to the full extent of their training.
Certificate of Need laws block new clinics and hospitals from opening. About 30 states require permission from private local healthcare providers to open or expand medical facilities. The federal government stopped using these laws because they were found to reduce neither costs nor improve quality. The main beneficiaries are incumbent medical providers that face less competition.
HOUSING
YIMBY reforms work. Austin rents dropped roughly 15% from their pandemic peak after a construction boom. An Austin or Minneapolis-style YIMBY victory in California would cut child poverty by as much as the Child Tax Credit. Housing costs contribute to poverty rates.
The basic policy ask (legalizing duplexes, triplexes, apartments, and backyard cottages in residential neighborhoods) is well-organized and well-known.
But some less-discussed rules also raise costs significantly:
Parking minimums add roughly $88-500 to rent or mortgage costs. The range varies by location. Many cities require 1–3 per single family home or apartment. The cost gets passed to renters and buyers whether they own a car or not.
Three story buildings with only one staircase are illegal in most U.S. jurisdictions. Single-staircase bans make small apartment buildings expensive to build and rent. A second staircase in a four-story building costs $260,000 and takes up to 7% of floor area. Allowing a single staircase makes family-friendly apartments with three or four bedrooms feasible. Most countries allow single-stair designs for ten-plus stories.
Permitting add up to a third to the gap between what a home costs to build and what it sells for. In Los Angeles, the most populous county in America, it takes 4.2 years to get approval for a mid-size apartment building. Studies of land before and after approval show the permit process alone makes land 50% more valuable — a $1 million plot becomes worth $1.5 million with the permit. LA and San Francisco are extreme cases. But even across the rest of the country, a study of the 50 largest metro areas found none with both high rents and a high number of permits.
This is a living post. I’ll keep adding to it over time.
I’ll also add elder care, food costs, occupational licensing, and more in future posts.
If you know of a rule I should include, let me know.
"The ADA fights [dental therapists] everywhere. They argue everyone deserves a full dentist. But cost keeps millions of Americans from seeing any dental provider at all. Also, dental therapists work under the supervision of a dentist."
Others have made this point, but it's amazing how much our regulatory environment is just letting the perfect be the enemy of the good. Yes, in theory everyone deserves access to a dentist. In theory, everyone should have an extremely specialist childcare worker looking after their child. But if in practice that means less access to dental care and child care, we're just doing harm.
Great list. The Abundance movement needs to get alot more specific on what specific regulations it wants to undo and create model bills for state legislatures to copy.