Child Care Handbook - BRIDGE Housing

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A GUIDE FOR DEVELOPING C H I L D C A R E FA C I L I T I E S WITH AFFORDABLE HOUSING Child Care Handbook BUILDING S U S TA I N I N G LEADING

Published by BRIDGE Housing Corporation 345 Spear Street, Suite 700 San Francisco, CA 94602 www.bridgehousing.com Copyright 2006 by BRIDGE Housing Corporation All rights reserved. Editor: Lihbin Shiao Design: Argus, LLC Typesetter: Blue Friday Type & Graphics 2 B R I D G E Housing Child Care Handbook

Table of Contents I. Acknowledgments 4 Executive Summary 6 Disclaimer 7 Introduction 8 California Child Care System—A Primer Key Definitions California Child Care—Institutions and Public Funding Structure Licensing & Accreditation II. Assessing the Market Market Demand Market Supply Methods for Identifying Providers Criteria for Selecting a Provider IV. Partnering with a Provider Legal and Structuring Issues during Development and Operations Legal Documents V. Financing How Child Care Facilities Have Been Financed Common Capital Sources Debt Financing—Underwriting the Provider Other Discretionary Funds Term Sheets for Capital Sources 1. Public Capital Sources 2. Private Capital Sources VI. Designing Child Care with your Housing Development General Space Requirements and Common Issues Child Care Considerations During the Design Process How Providers Can Add Value During the Overall Design Process Licensing Requirements and 17 26 29 31 37 39 41 42 47 49 50 Appendix Guide to the Appendix Glossary of Child Care Terms Resource & Contact Lists Resource Agencies Choosing a Provider—Request For Proposals/Qualifications Examples Partnering with a Provider— Lease & Service Agreement Example Financing—Proforma Examples Design—Sample Initial Parameters for Architects Center Case Studies 155 157 158 159 160 161 162 165 167 168 177 184 189 219 258 262 265 63 65 66 68 74 77 78 87 99 102 106 120 Recommended Standards Best Practices Design Checklist Child Care Facilities Design Matrix— 121 125 Regulations and Developer Recommendations 132 B R I D G E Housing Child Care Handbook: Table of Contents The Benefits of Family Child Care Economics and Resources Licensing Use, Occupancy, and Fair Housing Issues Design Considerations Management Issues TA B L E O F C O N T E N T S III. Choosing a Provider 11 13 VII. Another Child Care Option: Family Child Care Rental Units 3

Acknowledgements This handbook would not have been possible without the generous contributions of many people and institutions. First and foremost, BRIDGE Housing Corporation thanks the David and Lucile Packard Foundation, the S.H. Cowell Foundation, and staff at the Low Income Investment Fund (LIIF) for providing the funding, support, and the insight and inspiration for the creation of this handbook. Many of the members of LIIF’s Affordable Buildings for Children’s Development (ABCD) Developer Peer Network also generously shared the resources they internally created while developing child care centers over the years which are included in the appendix and reviewed the contents of the handbook for accuracy and scope. ACKNOWLEDGEMENTS Thank you also to the many people and institutions that contributed generously of their perspective, passion, knowledge, and time. A list of contributors is below. David and Lucile Packard Foundation Carla Dartis Robin Carlson Helen Dunlap S.H. Cowell Foundation Lise Maisano Susan Vandiver Low Income Investment Fund staff Maria Raff Noni Ramos Marie Young (formerly of the Packard Foundation) Claudia Siegman Susan Harper ABCD developers and participants Vern Plaskett and Wendy Mahaney— Child Development Inc. Ed Bolen— Child Care Law Center Robin Hughes & Frances Lee Hereth—Los Angeles Community Design Center David Wilkinson— Mercy Housing Sue Reynolds— Community Housing Works 4 Child Care Learning Partner Paul Miller, Nancy O’Rourke, and Kate Breitzman—Kidango Architectural Expertise Paulett Taggart— Paulett Taggart Architects Tara Siegel—Architect, Rose Fellow, the Pratt Institute Legal Aaron Sobaski & Rebecca Hlebasko—Sheppard Mullin Richter & Hampton, LLP Michael Stern— Cooley Godward Kronish, LLP Scott Barshay— Gubb & Barshay, LLP David Kroot— Goldfarb & Lipman, LLP Expertise from other Intermediary Organizations Ellen Dektar— Alameda County Local Investments in Child Care Fran Kipnis— California Resource and Referral Network Market Study Expertise Janet Smith-Heimer— Bay Area Economics Others who also shared child care development and services experience Thai An—Chinatown Community Development Corporation Fonda Davidson— Cross Cultural Services Elizabeth Acosta— Unity Council Liisa Hale & Clair Bainer— Association of Children’s Services/Blue Skies for Children Content Reviewers Maria Raff Fran Kipnis Ed Bolen Claudia Siegman Paul Miller Kate Breitzman Tara Siegel Marie Young Handbook Layout Design Jeff Breidenbach— Argus, LLC Handbook Typesetters Candace Creasy— Blue Friday Consultant Emily Weinstein B R I D G E Housing Child Care Handbook: Acknowledgements

Credits Contributors Lihbin Shiao, Editor & Principal Author Tripp Borstel Kate Breitzman Calvin Gladney Kevin Griffith Lillian Lew-Hailer Paul Miller Maria Raff BRIDGE Child Care Committee, Researchers, & Editors Pam Anderson Tim Baker John Gildersleeve Kevin Griffith Susan Johnson Diane Mailey Lara Sao Pedro Lydia Tan Emily Weinstein Devon Williamson Jung Yun ACKNOWLEDGEMENTS B R I D G E Housing Child Care Handbook: Acknowledgements 5

Executive Summary EXECUTIVE SUMMARY Like affordable housing, the question of what kind of opportunities we want to provide for in society is at the heart of quality affordable child care. Child care serves two primary functions: 1) Quality child care facilities provide a safe environment for the social and educational development of the next generation and 2) Child care enables parents to work and is a tool towards achieving greater economic success. Quality affordable child care is a resource that can level the economic and educational playing field for low- and moderate-income families. As affordable housing developers, we are well acquainted with the challenges of developing affordable housing. Affordable housing developers compete to creatively stretch and utilize a limited pool of public and private financing sources to develop housing. And even though the demand for affordable housing continues to far outstrip our ability to supply housing, the affordable housing industry has changed substantially since 1987 with the inception of the low-income housing tax credit (LIHTC) program. In the last 20 years, the LIHTC program has created a dedicated source of funding for affordable housing, has changed the legal framework in which housing is developed, managed and monitored and has influenced design standards for new housing developments. Since the creation of the low income housing tax credit program, the affordable housing industry has grown and learned a great deal, and has become increasingly more financially sophisticated. The system for child care facilities development is not as sophisticated or developed as today’s affordable housing industry. There is no industry-wide source for financing the development of child care facilities. The design and construction of child care facilities continues to be a specialized and “boutique” business for architects. Development experience and capacity among child care providers is rare. Lastly, affordable housing developers have minimal experience and training with respect to special requirements for developing child care facilities. However, many affordable housing developers recognize that quality child care facilities are an important asset to a community, enabling low- and moderate-income families the ability to work and attain a modest quality of life. Recognizing the gap between the demand and supply of affordable child care, the David and Lucile Packard Foundation, as part of their Affordable Buildings for Children’s Development Initiative (ABCD), assembled a developers’ consortium in 2003 to leverage the affordable housing industry as an ally and increase the amount of affordable child care within affordable housing developments. As one of the initial members, BRIDGE Housing Corporation (BRIDGE) proposed the creation of this handbook to serve as a resource for affordable housing developers seeking to build new child care facilities and family-owned child care homes along with affordable housing. This handbook serves as a guide through the development process, providing best practices, key considerations, resources, tools, and recommendations for each stage of the development process. BRIDGE’s experience developing child care facilities and the knowledge gained from our participation in the Packard Foundation funded Affordable Buildings for Children’s Development Initiative form the basis for the recommendations and resources provided in this handbook. The handbook is organized into seven core chapters plus an appendix. The core chapters contain information about understanding the California child care system, assessing the market for child care in your area, choosing a child care provider, structuring the relationship with the child care provider, financing child care facilities, designing a child care facility with your housing development and the option of developing family child care units within your housing development. The appendix provides resources associated with each core chapter, a glossary of child care terms, and center case studies with summary sheets with some of the center’s development and operating vitals. 6 B R I D G E Housing Child Care Handbook: Executive Summary

Disclaimer The information contained in this child care handbook is provided as a service to the affordable housing development community, and does not constitute legal advice or the advice of a design, construction or other professional. We have endeavored to provide quality information, but we make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this child care handbook or in any website or other resource referenced in this handbook. You should be aware that this information may have become out of date. BRIDGE cannot make a commitment, and disclaims any duty, to update any of the information provided in this handbook. The information provided in this handbook is provided “as is” and without warranties of any kind either express or implied. As legal or other professional advice must be tailored to the specific circumstances of each development, and as laws, codes, industry standards and industry best practices are constantly changing, nothing provided herein should be used as a substitute for the advice of competent counsel or the advice of design, construction or other applicable professionals. DISCLAIMER B R I D G E Housing Child Care Handbook: Disclaimer 7

Introduction “Our goal is not just to develop housing, but to revitalize communities.” —Carol Galante, President, BRIDGE Housing Corporation Why Develop Affordable Child Care with Affordable Housing? INTRODUCTION Although women entered the labor force in large numbers half a century ago, an adequate child care system that supports their essential contribution does not yet exist. Quality affordable child care provides children from low- and moderate-income families with an educational head start to improve their life outcomes preparing the next generation for life and school developmentally and educationally. The Lifetime Effects High/Scope Perry Preschool Study found that high-quality preschool education programs for young children living in poverty resulted in better performance in education, economic performance, and crime prevention in the short and long term at a statistically significant level. The program group outperformed the no-program group in terms of education, economic performance, crime prevention, health, and family and children. Quality child care also has a direct impact on a child’s future housing consumption when the child is an adult. The Lifetime Effects High/Scope Perry Preschool program group had significantly more stable dwelling arrangements at ages 27 and 40 than their peers of similar socioeconomic background. Rather than paying rent, receiving a subsidy, living with others, or being incarcerated, more of the program group owned their own homes and/or paid more per month for their dwelling.1 In most California counties, child care demand far outstrips the existing supply of child care. 2 Overall, licensed child care is available to only 25 percent of all children ages 0–13 with parents in the labor force.3 This shortage in supply means that most California families struggle to make child care arrangements. Most parents patch together multiple child care arrangements in order to get through the day, as shown in the most recent 2000 U.S. Census. Facilities shortage is a contributing factor to the shortage of child care supply. Housing and child care costs place the largest strain on families since these two services consume the biggest portions of household budgets.4 Many households in California pay more than the recommended 30 percent (30%) of their income towards housing, and some pay up to 60 percent (60%). 5 “Child care consumes 19% of a two working parent family’s basic budget and 23% of a single-parent family’s basic 1 Schweinhart, Lawrence J., Ph.D. The High/Scope Perry Preschool Study Through Age 40. Ypsilanti, MI. High/Scope Press. November 2004. 2 See the California Resource and Referral Network’s “Child Care Supply in California” for statistics. http://www.rrnetwork.org/rrnet/our research/2003portfolio.php 3 California Child Care Resource & Referral Network. The 2003 California Child Care Portfolio. 4 United Way. “The Bottom Line: Setting the Real Standard for Bay Area Working Families.” 2004. 5 The California Budget Project. “Locked Out 2004: California’s Affordable Housing Crisis.” January 2004. (2) 8 B R I D G E Housing Child Care Handbook: Introduction

budget.”6 This means that minimum-wage families with just one preschooler cannot afford both child care and housing.7 A family with two working parents needs an annual income of 58,269 (an hourly wage of 14.01) in order to pay for child care, housing, and have a modest standard of living. 8 Therefore for many Californians, just making ends meet is a struggle. 9 These families choose between paying for housing, child care, utility bills, health care, and/or food. INTRODUCTION Quality affordable housing and child care in tandem help families achieve self-sufficiency. Without placing an undue burden on the families’ finances, affordable housing provides a stable base for family life. On-site or easily accessible, affordable child care allows parents to work and to return to school while their children receive the early care and education they need for a successful future. Since over 90% of former welfare recipients do not have access to a car, child care located close to the home or the work place, or alternately along major transit lines, increases access for low-income working families. 10 Also, since most parents place their children in child care arrangements (approximately 75%) closer to the home than the work place, in addition to addressing a need, co-locating child care and housing provides greater convenience to families and reduces commute time.11 As developers of affordable housing, we can make a difference by building child care facilities along with our housing developments. Developing child care facilities with affordable housing makes good sense from a people, policy and business perspective. Affordable housing and child care are cornerstones for low- and moderate-income families building their way towards financial stability and eventually success for their children and their children’s families in the future. In January 2003, BRIDGE Housing Corporation (BRIDGE) joined a consortium of developers selected by the David and Lucile Packard Foundation for the new Affordable Buildings for Children’s Development (ABCD) Initiative. The consortium was created to utilize the expertise of regional community developers to increase the construction of child care facilities within educational, health, and housing facilities statewide. The other initial partners of ABCD were: Child Development, Inc. (CDI), Los Angeles Community Design Center (LACDC), Mercy Housing California (Mercy), Low Income Investment Fund (LIIF) and Community Housing Works (CHW). Over the last several years, BRIDGE has learned a great deal about child care facilities development from our participation in the consortium. Although BRIDGE had developed a number of child care centers over the years, as housing developers, we had not focused as diligently on how we could better develop child care facilities within our housing developments. The Packard grant, the shared experiences of members of the consortium, and our partnership with well-respected regional child care providers, has enabled us to take a step back and reconsider the impact we can have in the child care arena. As a result, BRIDGE has restructured the way we approach child care facilities development. These changes include when we consider 6 The California Budget Project. “The State of Working California 2004: Little Progress for California’s Workers and Their Families.” September 6, 2004 (7) 7 Ibid 2. 8 Ibid 6. (3) 9 The California Budget Project. “Making Ends Meet: How Much Does it Cost to Raise a Family in California?” October 2003. (1) 10 Federal Transit Act of 1998, Sec 3037, Job Access and Reverse Commute Grants as cited in “Transportation and Social Equity.” California Alliance for Transportation Choices. From Ellen Dektar, Alameda County Local Investment in Child Care Project. “Facts about Child Care and Transportation.” 11 Nelson/Nygaard in association with Bay Area Economics. “Child Care Feasibility Study for BART: Issues Paper.” May 1992. B R I D G E Housing Child Care Handbook: Introduction 9

developing child care facilities with housing, how we seek provider partners and how we structure our relationships with them, the overall design of our child care facilities, the size and type of centers we develop, and the types of financing we access. INTRODUCTION Our goal with this handbook is to share lessons BRIDGE and our partners have learned through development experience over the years and through the participation with the ABCD consortium. It is our hope that this handbook will serve as a starting place for affordable housing developers seeking to build child care facilities and that with this resource, more child care facilities will be built. 10 B R I D G E Housing Child Care Handbook: Introduction

A GUIDE FOR DEVELOPING C H I L D C A R E FA C I L I T I E S WITH AFFORDABLE HOUSING The California Child Care System— A Primer BUILDING S U S TA I N I N G LEADING

I. The California Child Care System—A Primer THE CALIFORNIA CHILD CARE SYSTEM— A PRIMER Key Definitions Child Care Child Care Facility Licensed Center-based Care Licensed Home-based Family Child Care Informal/License Exempt Care Proposition 10/First 5 Program Alternate Payment Program CalWORKS Head Start Program Head Start Grantees Head Start Delegates Resource and Referral Agencies Local Planning Councils Community Care Licensing California Child Care—Institutions and Public Funding Structure Alternative Payment Program (AP Program) Center-based Subsidy (CDE) Head Start Other Financing Programs Licensing and Accreditation Licensing Accreditation Beyond Accreditation 12 11 13 13 13 14 14 15 15 15 16 16 16 16 17 17 17 17 20 21 23 26 26 26 27 28 B R I D G E Housing Child Care Handbook: The California Child Care System—A Primer

The California Child Care System— A Primer Summary This chapter provides a basic understanding of the child care system in California. This chapter describes what child care is, the structure of California’s primary child care institutions, types of child care subsidy available to provide child care to low- and moderate-income families, licensing and accreditation, and resource agencies which support the provision of child care. Key Definitions CHILD CARE “The National Conference of State Legislatures defines child care as ‘all types of education and care for children from birth through age five and programs for school-age children before and after school and during vacations. It refers to a wide range of programs located in different types of facilities, under a variety of auspices, and with different hours of operation, from part-day to full day.’” 12 In this handbook, the term “child care” refers to care arrangements for children from birth through age five. Child care facilities and service needs of children from birth through age five differ significantly from the after-school needs of school-age children, which are not covered by this handbook. Infant care refers to child care for children from birth to one year. Toddler care refers to child care for children from one year to age three. Preschool refers to child care and a school preparedness learning experience for children ages three through five which are not yet attending kindergarten. C H I L D C A R E FA C I L I T Y The term “Child Care Facility” has replaced the term “Child Day Care Facility,” in recent years. The Health and Safety Code Section 1596.750 states: “‘Child Day Care Facility’ means a facility which provides nonmedical care to children under 18 years of age in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual on less than a 24-hour basis. Child Day Care Facilities include day care centers and family day care homes.” 13 12 California Working Families Project. Understanding Child Care: A Primer for Policy Makers. February 1999. 13 Child Day Care (CCC) Act of 2004. “Evaluation Manual.” April 14, 2004. Health and Safety Code, Sections 1596.750, 1596.866 and 1797.191. B R I D G E Housing Child Care Handbook: The California Child Care System—A Primer 13 THE CALIFORNIA CHILD CARE SYSTEM— A PRIMER Below are key definitions that are helpful in understanding the California child care system and will facilitate your understanding of the following handbook chapters. Additional terms are defined in the Glossary, as part of the Appendix.

LICENSED CENTER-BASED CARE THE CALIFORNIA CHILD CARE SYSTEM— A PRIMER Licensed center-based child care is provided in a child care facility which is licensed and regulated by the State Department of Social Services’ Community Care Licensing Division under Title 22, Division 12 of the California Code of Regulations and the California Health and Safety Code. Licensed providers must meet the minimum standards mandated under Title 22 and under the Health and Safety Code. If the provider has a contract with the state to provide subsidized care, the provider must also meet the minimum standards mandated under Title 5, Division 1, Chapter 19. Child care is commonly provided in a classroom-like setting in a commercial space such as an office building, amenities building of a residential development, or a church. Providers range in size, including operators of single centers, large regional providers with multiple centers, and a handful of statewide operators. Child care operators cater to specific clienteles, organized, for example, by neighborhoods, corporate sponsors, age group, special needs, and income. L I C E N S E D H O M E - B A S E D FA M I LY C H I L D C A R E Licensed home-based family child care is provided in the home of an individual or family, licensed and regulated by the State Department of Social Services’ Community Care Licensing Division under Title 22 of the California Code of Regulations and under the Health and Safety Code. The two types of licenses are described by Community Care Licensing below:14 1 . L A R G E FA M I LY C H I L D C A R E H O M E Large family child care homes may be licensed for a capacity of either 12 or 14. If licensed for 12, no more than 4 may be infants (0 to 2 yrs). If licensed for 14, 2 children must be at least 6 years of age and no more than 3 may be infants. The licensee’s and assistant provider’s children under age 10 are always counted in the capacity. 2 . S M A L L FA M I LY C H I L D C A R E H O M E Small family child care homes may be licensed for a capacity of either 6 or 8. If licensed for 6, a provider may care for no more than 3 or 4 infants only (0 to 2 yrs). If licensed for 8, 2 children must be at least 6 years of age and no more than 2 may be infants. The licensee and assistant provider’s children under age 10 are always counted in the capacity. 14 http://ccld.ca.gov/. 14 B R I D G E Housing Child Care Handbook: The California Child Care System—A Primer

I N F O R M A L / L I C E N S E E X E M P T C A R E 15 A child care facility that does not require a formal child care license. A license is not required for: 1. Any person providing care for the children of only one family, in addition to the operator’s own children. 2. Any care and supervision of persons by a relative or guardian. 3. Certain public and private schools that operate a program before and/or after school for school-age children. 4. Certain public and private recreation programs. 6. Child care on federal lands. PROPOSITION 10/FIRST 5 PROGRAM Approved by voters in 1998, Proposition 10 established the California Children and Families Program and the State Commission, otherwise known as First 5 California. The ballot measure added a 50-cent-per-pack tax to cigarettes and comparable tax on other tobacco products. The Governor and the State Legislature appoint a Proposition 10 State Commission, which oversees Proposition 10 County Commissions. At the local level, Proposition 10 County Commissions develop First 5 Plans and administer Proposition 10 funds in accordance with their respective plans. A L T E R N AT I V E PAY M E N T P R O G R A M ( A P P R O G R A M ) The AP Program is a form of public subsidy for child care. The AP Program works in a similar way to Section 8 vouchers for housing. An AP Agency reimburses the child care provider at the same time fees are due from non-subsidized full-fee families. The reimbursement rate is capped by a state-sponsored study called “Regional Market Rate Survey of California Child Care Providers” (RMR).16 Voucher values depend on the rate charged by the child care provider, who cannot charge more than the amount charged to a non-subsidized child. The provider must use the fee schedule issued by CDD and apply the schedule in accordance with the adjusted monthly family income and the family size. Without restriction, parents may choose to pay an additional amount for child care out of their own funds. The AP Programs provide a number of services to low-income families including: Ensuring parents have a choice of providers Providing parents with community support information Offering access to toy closets and resource libraries Linking families directly to programs and services such as food stamp programs, nutrition programs, fingerprinting programs, health and dental programs, mental health services, and respite services. 17 15 http://ccld.ca.gov/. 16 The Regional Market Rate is available online through the California Alternative Payment Program Association at http://www.cappaonline.com/. 17 Ibid 16. California Alternative Payment Program Association. The Role of Alternative Payment Programs in California. B R I D G E Housing Child Care Handbook: The California Child Care System—A Primer 15 THE CALIFORNIA CHILD CARE SYSTEM— A PRIMER 5. Cooperative arrangements between parents that involve no payment.

CALWORKS THE CALIFORNIA CHILD CARE SYSTEM— A PRIMER The California Work Opportunity and Responsibility to Kids (CalWORKS) is the California State welfare program also known as Temporary Assistance for Needy Families (TANF). There are three stages under the CalWORKs program: Stage 1, CalWORKs child care, is administered by county welfare departments. Stage 1 provides child care subsidies for the first six months that a recipient receives aid. Stage 1 can be extended if it takes longer for a recipient’s child care or work situation to stabilize. Stage 2 and Stage 3 of CalWORKS is administered through the California Department of Education (CDE). A CDE case worker then refers the recipient to a Resource and Referral (R & R) program, which assists the recipient in identifying their Stage 2 child care provider (which can be the same as the Stage 1 provider). The R & R also connects the recipient with an AP Program (which can be the R & R) responsible for paying the chosen provider. Stage 1 serves children ages 12 or below; Stages 2 and 3 serve children up to the age of 14. 18 H E A D S TA R T P R O G R A M Head Start is a federally funded, holistic child care program that addresses the emotional, social, educational, nutritional, and health needs of children from the age of three until they enter school. Head Start provides annual funding to providers through renewable grants in exchange for child care services. California is part of Region IX, which is headquartered in San Francisco. The Regional Office contracts with “Grantees” to provide Head Start programs. Region IX oversees 92 Head Start and Early Head Start Grantees serving about 125,000 pregnant women, infants, toddlers and children. At time of printing there were no new Head Start or Early Head Start grants available. Additional information about Region IX can be found on their website: http://www.acf.hhs.gov/programs/region9/. H E A D S TA R T G R A N T E E S Grantees are public or private, for profit or nonprofit organizations, or public school systems that provide Head St

Mercy Housing Sue Reynolds— . Affordable housing developers compete to creatively stretch and utilize a limited pool of public and private financing sources to develop housing. And even though the demand for affordable housing continues to far outstrip our ability to supply housing, the affordable housing industry has changed .

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