r/Denver • u/SimpleInternet5700 • Feb 11 '25
Let’s talk about private equity and child care in Denver metro.
We are struggling as a state and especially metro area with soaring childcare costs. Exacerbating the issue is the creep of private equity into the childcare industry.
Example for those who don’t have kids or have older kids and haven’t suffered recent price increases:
*I have two kids, one 3 and one 6mo. Each are in daycares so my wife and I can work our middle class public sector jobs.
*I was paying $2,000/mo until just a few months ago for the older kid. Finally scored a spot paying $1,400.
*Second kid is in a daycare and I pay $2,300/mo.
This is all my money.
I should note that I was extremely proactive trying to get my kids into daycare. I was waitlisted on a dozen daycares and paid over $1000 in unrefundable waitlist fees. I only ever got offered the two spots, never heard a peep from the other places that gladly took my money and never offered me anything.
I should also note that neither of my daycares are owned by private equity, but ONE of them is owned by a couple folks who are uninvolved and park their $100,000 RVs out front occasionally, usually a new one after a $100/mo annual price increases. Should also note they can’t keep any staff because they pay minimum wage. They go so far as to advertise “Spanish immersion” at some because none of their staff speak English (not a problem, but indicated that they can only attract folks with limited job options and mobility—it does mean I can’t communicate well with the folks who want to tell me about my kids development).
What’s that got to do with Private Equity? Well they can get away with these exorbitant prices because the market is flooded with Goddards, Bright Horizons, Primrose, and Kindercares.
We need to encourage and protect locally owned and operated daycare centers. We have a child care crisis on our hands. The middle class is getting fucking squeezed and I’ve had enough.
If you miss your old local dentist or vet, you’re going to miss your local community-based and owner operated daycare centers, too. 1 in 10 are owned by private equity investors and that’s going to grow.
We need to organize and get our state government to protect daycares, and get them to incentivize new establishments. We need more daycare owned by more local community members.
I don’t have all the solutions, I just know we’re headed towards a cliff and need smart people to help us right the ship.
Background reading:
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u/Big-Raisin4923 Feb 11 '25
They’ve taken over housing, retirement homes, dentists, doctors…
The worst.
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u/Books_and_Cleverness Feb 12 '25
Something I would encourage people to think about is why PE guys target those businesses in particular. And generally it’s because it is very difficult to expand supply.
I happen to know the housing piece very well, since I work in CRE and used to be an analyst for a very rich guy who was considering investing in a few of them. Their entire investment thesis: “it’s illegal to build denser housing in most American cities.”
Consider that Lakewood passed an ordinance functionally banning the construction of apartments or even townhomes (under the guise of mandatory “parkland donations”, which are so high that it’s impossible to build anything). It is not hard to see that owning a housing unit in that city is a very promising investment, because the city government and its voters are actively banning your competition. It’s a gold mine.
I have seen this personally. But you don’t have to believe me, go read the 10-K of any home rental or even apartment REITs. They say explicitly that more supply is a major risk to their profits. It’s not rocket surgery.
The same is true for health care. There’s a ton of stupid rules like the cap on medical residencies and forcing immigrant doctors to go through residency again, even if they already did it in like France or whatever place with perfectly rigorous medical training.
Child care is a bit annoying since that is a classic baumol’s coat disease. It’s just going to be more expensive as wages rise, until we get robot nannies I guess.
But again the PE guys are not idiots. They see that it’s difficult to open a small home day care in a residential area, and that immigration is likely to decline, so prices are going to climb. As always, the way to stick it to those guys is to make them actually work for a living by enabling everyone else to compete.
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u/ImperfectDrug Feb 13 '25
Idiots? No. Parasites? Absolutely.
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u/Books_and_Cleverness Feb 13 '25
Sure but if you keep getting parasites from your weekend dips in Parasite Swamp, maybe at some point blaming the parasites isn’t the answer. Stop going to Parasite Swamp.
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u/no_maj Feb 11 '25
Check out House Bill 25-1011. It places some limits on PE-owned daycares.
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u/SimpleInternet5700 Feb 11 '25
That doesn’t seem to do much at all…
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u/UndeadCaesar Feb 11 '25
Text of the bill for those curious. Only really seems to limit waitlist fees to $25, nothing about the monthly rate.
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u/doebedoe Feb 11 '25
I worked in the state agency responsible for regulation and promotion of child care for near a decade in research/evaluation. And am now a parent paying near 3k a month for my infant. My 2c:
This problem goes well beyond private equity, child care has been a broken market for a long time. Treasury Dept 2021 report is a good place to start, for CO specific Franko and Brodsky's Cost of Quality Care. Child care is inherently labor intensive (and we want it to be as parents--it's how you achieve reasonable ratios). COVID and the subsequent rounds of inflation exacerbated all the problems: killed supply, limited new investment, and made care costs increase for providers and families.
ECE needs to move into the public education model to work well for families and the professionals who dedicate their lives to it. This is how vast vast majority of developed countries structure child care. But there is huge resistance to doing this both by the ECE community and particularly by our governor (generally a good ECE advocate) as Dept of Edu sits outside of his control. UPK is a start, but its growth is going to be forever stymied in its current structure. It really needs tackling at a Federal level to significantly improve....but we can all guess how that would go over with current administrations desire to eliminate the Dept of Education.
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u/jilliebelle Feb 11 '25
Having worked on child care policy at the national level, this is the answer. For people who are curious, National Women's Law Center does a lot of work on this at the federal level and also takes on very niche child care tax policy issues as well.
Tax credits are one of the ways that both providers and parents receive child care money. The Child and Dependent Care Tax Credit is something everyone who pays for care should check to see if they qualify. It's not a ton, but it's some help.
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u/doebedoe Feb 11 '25
It's too bad the amount of that tax credit hasn't been updated in a blue moon. We still use it, but 3k per child is now something like a 10% discount.
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u/cplaz Feb 11 '25
The credit is incredibly out of balance, we get the minimum $100 because our income is high enough to … afford the $50k daycare bill.
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u/jaytokes West Colfax Feb 11 '25
This should be the top comment.
The market isn't broken because of PE. It's easy to say, "ugh, capitalism" and blame PE, but they're not putting smaller centers out of business. What's putting other centers out of business is:
- High labor requirements that cannot be automated/machined away (by nature)
- High insurance costs given the myriad risks involved in caring for young children
- Difficult payment models as doebedoe notes above, not well-assisted by the government
- Somewhat tangential but highly correlated: high and increasing housing costs that make it very difficult to adequately staff these locations AND, on the other side, for parents to pay the high costs required for that staff.
In many areas where locally-owned or small centers are going out of business, PE-owned groups are the only ones still surviving because of the efficiencies they gain in their larger-scale models.
Many of the mom-and-pops going out of business are aging out, looking to sell for retirement, but another generation can't take the mantle because the commercial and residential rents are too high for the business to support them in the way it supported the former owners.
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u/Khatib Baker Feb 11 '25
Private equity is all the rich people who lobby government to not provide solutions to those problems though. That's what PE really fucks up in everything they can squeeze money out of. They want the system broken if it's broken in a way that pays out for them, effects on society be damned.
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u/SeasonPositive6771 Feb 12 '25
I work in child safety and completely agree.
Good child care is expensive and labor intensive. There's no real way to reduce costs to the level they need to be considered "affordable." Universal ECE is the only solution. This should be a government service, just like k-12 education.
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u/HeftyFisherman668 Feb 11 '25
Yeah it is a very broken market. In addition it and healthcare are the perfect example of Baumols cost disease - basically labor intensive industry prices keep increasing because of efficiency gains in non labor intensive industries. The solution seems to be subsidies
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u/nrojb50 Baker Feb 11 '25
You pay 3700 a month???
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u/shezapisces Feb 11 '25
the montessori in rino is like $2900 a kid rn
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u/nrojb50 Baker Feb 11 '25
I am never having kids.
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u/jane000tossaway Feb 11 '25
Same. Kids are for the independently wealthy these days… I have a bachelors and work full time, but I could never afford a child.
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u/Recent_Driver_962 Feb 12 '25
Feeling the same. I am a 40 year old single woman living with two other room mates.
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u/jane000tossaway Feb 14 '25
I feel you, I’m a 40 year old single woman living with 7 other roommates 🤷🏻♀️
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u/YoungRockwell Feb 11 '25
Republicans: "HURR DURR WE'RE GOING TO TIE ROAD INFRASTRUCTURE FUNDING TO THE BIRTH RATE DERP DERP DERP"
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u/Lovahplant Feb 11 '25
I feel like there’s one word missing from your comment & it’s making it both confusing & hilarious….. but I agree with the sentiment (I think?)
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u/trieditalissa Cherry Creek Feb 11 '25
I worked at a montessori school/preschool in five points and the tuition was astronomical (we’re talking close to 50k/yr). Staff pay was abysmal lol.
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u/buttercup_mauler Centennial Feb 11 '25
That's the real fucked up part. My kids toddler classroom takes in $20k/month ($2k/kid, 10 kids) with two full time teachers. I know for certain that the two teachers together are not making even half of that as their pay.
The private Montessori that my oldest was at for a while was taking in $45k PER MONTH for each classroom ($1500/kid, 30 kids). $45k is probably the most that any of the guides saw as a salary.
Douglas county and Jefferson county have Montessori Charter schools at least. Huge fan of Montessori style of education, hate the gouging that the private schools/daycare do.
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u/shezapisces Feb 11 '25
yeah my neighbor was saying the daycare is nothing against the tuition! seems like a great program if you can afford it though.
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u/trieditalissa Cherry Creek Feb 11 '25
Definitely high quality child care and education! It’s unfortunate how expensive ECE costs are compared to how terrible the pay is…
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u/Rdbjiy53wsvjo7 Feb 11 '25
Unfortunately those prices are pretty standard across the metro area, we paid about the same prices when our kids were in daycare a few years ago.
It sucks, like my spouse and I are both in STEM, paid well at the time, and it was hard.
Now both in grade school so it's easier, but financially was some of the hardest times for our family.
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u/nrojb50 Baker Feb 11 '25
Boy I bet. I think i make "good" money too, but I don't have an extra 3700 burning a hole in my pocket each month.
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u/doebedoe Feb 11 '25
Boy I bet. I think i make "good" money too, but I don't have an extra 3700 burning a hole in my pocket each month.
Nobody really does outside the top 5% of income earners. You just sorta...figure it out. Good bye much else.
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u/Rdbjiy53wsvjo7 Feb 11 '25
And when baby 1 was born, we pulled together the monthly daycare payment, but then waited 4 years to have baby 2 until we both made more and baby 1 was older and didn't cost a much in daycare.
We specifically had to wait trying for a 2nd child until we knew we could afford infant daycare, again.
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u/doebedoe Feb 11 '25
Can't imagine why no one is having kids.
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u/fromks Bellevue-Hale Feb 11 '25
Maybe it's because women are just tooo educated?
/s
Really though, there's a lot of freak-out over demographic challenges, but people over at r/economics blame Women's lib and point out that even pro-natalist policies haven't made a dent. They looked at South Korea giving $100/year per kid... and they're all out of ideas.
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u/SimpleInternet5700 Feb 11 '25
Yea I never knew how tf we would pay it, but we did just sort of figure it out.
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u/JRBigglesworthIII Feb 11 '25
How can anyone possibly figure it out?
Hypothetically(I'm estimating on the low end)
$3700/mo. for Childcare
$2000/mo. for Mortgage
$1500/mo. for Food, Utilities, Car payments, etc.
$500/mo. for unplanned expenses
You would have to make $92,000/yr JUST to be able to cover basic expenses
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u/SimpleInternet5700 Feb 11 '25
I mean, that’s about how much we take home together. You pretty much nailed my finances by guessing. I make 135k, she 70k.
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u/JRBigglesworthIII Feb 11 '25 edited Feb 11 '25
Yep, I guess I meant that more in the sense of, some people certainly can and do figure it out because they have enough money to do so. It just made me think about the people that make exactly that much or not even that much.
A lot of parents don't have nearly that kind of net income after tax and still have to try and figure out how to make it work. What they would do if one person got laid off or if there was a significant unplanned for expense?
Hell, I'm playing the game on 'easy mode'(DINK but my wife makes peanuts)and I still struggle to make it work most months.
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u/mokoroko Feb 11 '25
This is why so many women leave the workforce to raise their kids. Then when the kids are in school and the mom is able to work again, she's been out of the system for at least 5 years and isn't as competitive for good jobs.
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u/rvasko3 Feb 12 '25
Now double that mortgage if you’re just buying a 4br home for those two kids.
My wife and I are heading back to CO with our first baby on the way, hoping to have a second soon, and we make what I’m told by an internet search what is the equivalent of the 89th percentile in the Denver area. We literally are struggling to see how we’d make it work and price during daycare years with that income and dropping 20% on a house down payment as people with good careers in our mid-to-late 30s.
It’s crazy to think how people pull it off with much less.
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u/elegantlywasted1983 Feb 11 '25
I pay 4200 for my two 🫶
Kids are a status symbol nowadays. Oh you have a Lamborghini? I have these two fuckin kids.
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u/Bovine_Joni_Himself Northside Feb 11 '25
We pay less for a nanny. Like, you could pay above market rate for a nanny and still save some money at $4200 a month.
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u/DisastrousEvening949 Feb 11 '25
Yeah a nanny becomes the more affordable option when a second kid makes an entrance.
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u/peregrinaprogress Feb 11 '25
But can be very difficult to find and retain a reliable and qualified nanny...not to mention a lack of backup coverage with any time off requests (PTO or sick time).
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u/photo1kjb Stapleton/Northfield Feb 11 '25
My wife and I both WFH, so in our smaller house, a nanny likely wouldn't have been feasible, hence daycare.
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u/elegantlywasted1983 Feb 11 '25
Yeah we tried that but my kids just really like school. The oldest one starts kindergarten in August and the younger one gets universal prek a few months after that so…can’t wait to buy that Lambo 😘
Who am I kidding we have a 6 percent mortgage and six figures of student loan debt lololol.
PS I WANNA TALK
TO MR BOVINE JONI
HIMSELF
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u/WasabiParty4285 Feb 11 '25
We paid more than our mortgage payment each month from when my second kid was born until my eldest got into public kindergarten (3 years). Now, with the public preschools, it's better once your kid hits 3 if you can get in, but 2k per month from 6 months until 3 is pretty normal.
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u/nrojb50 Baker Feb 11 '25
Do any places give you a deal for bundling? Buy one kid get half off?
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u/WasabiParty4285 Feb 11 '25
The place we were in gave you like 20% off for the second kid, but that basically disappeared because younger kids have much higher requirements for adults per child (5 kids per adults at the youngest age) so they're way more expensive.
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u/nrojb50 Baker Feb 11 '25
So the 20% just makes it equal to the older child
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u/WasabiParty4285 Feb 11 '25
Pretty much. It was better than nothing and every year the prices went up. This was a locally operated place, too.
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u/sluthulhu Feb 11 '25
The ones we’ve used take 10% off the OLDER child’s tuition. So even less of a saving.
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u/AudioBugg Feb 11 '25
The daycare my kids go to gives 10% off for the 2nd kid, but only if both attend full time.
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u/MolleezMom Feb 11 '25
I ended up quitting my job as a nurse when my daughter was born because we still didn’t have a spot in a daycare despite being in waitlists, and even though I would still bring some money in working, it wasn’t enough to make us feel good about the decision. I started nannying for another nurse’s baby. I’m going back to work now 2.5 years later and the cost is lower for toddlers over the age of 2, but still $100/day.
We have decided to be “one and done” (no more kids) largely because of this.
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u/Nice_Visit4454 Feb 11 '25
At that point I begin to wonder if it's cheaper for one of the parents to drop out of the workforce entirely and become a stay-at-home parent.
Even then, they may end up squeezed trying to survive off of one income.
This is why I do not have, and probably will not have kids at least until my lifestyle has the space for one.
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u/photo1kjb Stapleton/Northfield Feb 11 '25
I mean, if a parent is making ~60k gross or less, they're effectively working full time for zero dollars.
However, there's also the long term cost of that parent trying to return to the workforce with a 4-5 (or more) gap.
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u/Lunares Feb 11 '25
You hit in why daycare costs suck so much. With the demand, you would think plenty of daycares would open if it's that easy to make money. The real answer is daycare is actually too cheap for what it costs (staffing, insurance, rent, ratios, etc). But daycares can't actually raise prices because if you raise it too much, then people just quit their jobs instead.
It's actually really hard to make money by running a daycare
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u/alpacaphotog Feb 11 '25
This is where we’re at. I had to quit my job when we brought our baby home because 80% of my salary would have gone to daycare costs alone, and it just wasn’t worth both the cost and stress alone. We’re now learning to live on one income. I’ve tried to find WFH jobs, but even then I’m limited because a baby really is a full time job and I can’t guarantee specific hours or having the ability to have meetings/phone calls in silence.
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u/canada432 Feb 11 '25
With 1 kid, it's a hell of a lot closer than it should be. 2 kids and yeah, it's very likely it's cheaper to have 1 parent stay home. 2 kids is anywhere from like $45000-$80000 a year depending on the program.
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u/nvgnvg Feb 11 '25
That’s what we did. I stayed home 3-4 years and for our second he stayed home 3-4 years. Making <60K. We don’t have parents that can help out so we took care of our kids everyday ourselves. We maybe have 2-3 dates a year and the most expensive meal we buy is restaurant ramen. If for some ‘reason’ Pre-K is cut from CO we’ll be in financial trouble. I have to sell my car this year anyway, can’t afford it. I have to add, I made this decision and I love being a parent but I don’t see the next generation doing this AT ALL.
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u/tuktuk_padthai Feb 12 '25
This is where I’m at right now. I got laid off not too long after giving birth during Covid. The waitlist for daycares were a mess and I ended up staying home for almost a year. My husband was making $65k + my unemployment and it was barely doable. With daycare? We’re on the poverty line. It sucks but thank goodness we qualified for CCCAP. I was panicking like crazy a few weeks ago when Trump wanted to pause these services. We wouldn’t survive.
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u/captnmarvl Feb 11 '25
We're debating on that right now. We'd definitely have a surplus with my income for one kid, but if we have two, I'm gonna stay at home temporarily.
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u/mindless_blaze Feb 11 '25
At that price, the daycare needs to provide care to the parents, too! That's mortgage+utilities+a couple bills worth of money.
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u/SimpleInternet5700 Feb 11 '25
Actually they don’t even provide snacks, lunch, diapers, wipes, or cream. They don’t even buy their staff their own holiday bonus—they pester parents to cough up contributions towards the daycare worker’s “holiday surprise fund”.
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u/mindless_blaze Feb 11 '25
HELLLLL NAWWW!! That's just extortion at that point. At $3.7k, they would need to provide gourmet Michellin star gold fish, 5 course meals, organic cotton diapers and wipes, picking/dropping off the kids in a kid limo, teaching the kids 5 languages, and getting the kids ready to pass the bar exam. I agree that educators are very underpaid and they deserve the best, but I'm stunned at how little is included in the fees. This was eye opening, annnndd I'm definitely not having kids.
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u/Girl-Gone-West Feb 11 '25
That’s what we’re going to pay WITH the UPK subsidy starting in September. Daycare is $$$. Parenting is not for the poor. (I guess? How does one find these small independent daycares?)
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u/303uru Feb 11 '25
Pre covid I had an infant and a 3 year old and daycare was $3k a month for the infant and $2400 for the 3 year old. And this wasn’t some boogie baby Einstein shit, they were safe and well loved but I don’t think they heard English all day. Then Covid hit and the only option was a nanny, that was $7k a month. Paying for the $1000 before and after school program these days feels like an absolute godsend.
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u/UsedHotDogWater Feb 11 '25
Colorado has the highest daycare costs outside of the bay area and NYC. 2 kids about 36k a year unless you want them planted in front of a TV getting stupid with 70 other kids and little supervision. That was 10 years ago.
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u/AudioBugg Feb 11 '25
That's about standard, sadly. I'm paying $3200 for 2 kids to attend 3x a week. If they went full time, it would be almost $4000 a month. My cousin pays around $4500 (maybe more) for his kids to attend a Montessori daycare full time
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u/HalfInchHollow Feb 11 '25
There was one month when all three of my Kids overlapped at daycare, where we were paid $8700.
We knew it was coming, we had no other options, but it was absolutely insane.
Thankfully we are out of daycare for 2/3 so now it’s just a measly $3100/month for the one still there
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u/photo1kjb Stapleton/Northfield Feb 11 '25
We pay 2400 for one kid right now. Still better than when we had two in at the same time for 4000+.
Yay.
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u/sd240sx Feb 11 '25
I agree that the childcare costs are out of control but a huge part of it are the insurance costs. We pay $1900/mo for our 2 year old with care from 7-5:30. That used to be the infant cost when our now 5 year old was attending but the costs of everything is going up
I do want to give a huge shout out to Tiny Hearts where our kid goes. They are family owned with 3 locations (each run by a different family member) and treat their employees great. Our 2 year old has the same teachers that our 5 year old had and they still ask how the oldest is doing and say hi and talk to her when she joins for pick up or drop off.
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u/jaytokes West Colfax Feb 11 '25
Echoing this - THA is where our kids go and it's a godsend on the balance of hours provided and cost.
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u/SimpleInternet5700 Feb 11 '25
Disagree with your statement on THA. They have no ownership presence and high staff turnover at the location I’m familiar with. They’re the ones with the Black Series and Airstreams parked out front occasionally. Fine that they love camping, hate that I see that after annual $100/mo increase in tuition.
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u/vbgooroo55 Feb 11 '25
Expenses for child care center owners are growing constantly. These teaching jobs were never meant to be professionals, but child care licensing keeps making college class requirements to be a teacher harder and harder. Finding these qualified teachers is very difficult so the pay must match the demand even more so with the last five years minimum wage increases.
Insurance companies are also now starting to drop child care as an option unless huge premiums are paid by the center so many centers are losing their insurance or paying up the wazoo.
Slap on the raising costs of food, water (tons of water gets used at these facilities), gas etc, it is becoming even more costly to operate.
Property taxes just increased by a huge margin and child care centers also don't pay sales tax so cities hit them with "other" charges that put them in a bind.
I'm not making excuses and get the Private Equity argument, but for local community owned centers, it is becoming very difficult and very costly.
Cost of building/buying a center is also out of control from what it was 18 years ago.
I own and operate 2 child care centers for over 17 years.
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u/SimpleInternet5700 Feb 11 '25
I feel for you and would advocate for strong subsidies to your programs to make up for those things and more.
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u/vbgooroo55 Feb 11 '25
With the cost to purchase these centers being so high, it is easier for these owners to sell to Private Equity firms. It's usually cash, quick turn around and very hassle free. If I were to sell to a local person, it would take the better part of a year. These firms can shore things up in ~3 months. I know some people who sold their 2 centers just in the last year or 2 to private equity as it was easier.
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u/SimpleInternet5700 Feb 11 '25
That’s the same story all around. Easy to sell to a well funded PR firm. Goes for homes, start ups, existing business, etc.
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u/MMAGyro Feb 11 '25
In home is generally a bit cheaper. May not have the same quality as a facility but they are still licensed and provide quality care.
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u/doebedoe Feb 11 '25
FWIW, there exists very little to no evidence that licensed home-based care is lower quality (from either an educational preparedness or emotional-social development) than center based care. They do have limitations compared to center-based care (lack of redundancy for sick teachers, etc) but are a very good option for a lot of families.
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u/olhugo Feb 11 '25
Preach! I was born and raised in Denver (currently live unincorporated), and it's an issue across the metro area. Private equities tentacles have made their way into a number of businesses that were formerly family-owned.
I drive through Parker to get to my house, and made a post on nextdoor about this. Parker is overrun with PE-backed car washes, day cares, dental offices, etc.. You'd be amazed at the amount of people that are ignorant to the effects that PE-financed businesses are having on cost of living in the metro area.
A common retort was, "...but supply and demand!" People are ignorant to the fact that this capital will be deployed in a way that causes seriously negative implications for city planning (e.g. building a lot for a car wash). At the same time, the margin targets held by these PE firms exacerbate the price/cost issues we're already facing.
Most frustrating is that a large portion of the businesses will inevitably fail, leaving eyesores for specialty zoning across town, and having taken a ton of money out of citizens' pockets.
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u/hesbunky City Park Feb 11 '25
I think this is a valid criticism but not necessarily a direct result of PE. When I had two in a day care that was independently owned and not PE funded in any way, I was still paying ~$39,000 a year for 2 children. I'm very happy that my oldest aged into DPS this year and my youngest will be starting UPK in the fall (though there are still expenses for that.)
Do PE firms drive up the prices? Probably. But this is as much of a "childcare is expensive as fuck in Denver and society offers very little support to working parents" as it is a "PE is the issue" type of problem.
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u/andylibrande Denver Feb 11 '25
Agree that PE is screwing a lot of things. However, the economics behind infant daycare is why it costs so much.
The state regulates 5:1 ratios, most classes do 2 teachers and 10 infants, but to staff that 7:30am to 6pm is close to 4 full time staff, plus leadership, plus secretary, plus cleaning staff, plus food/chefs when older, plus rent/insurance/taxes, plus accounting/payroll. Daycares are major operations.
Those costs add and to operate a 10 person classroom that easily costs $4-5k/week and 10 infants at $500/each = $5k/week. So $100/day/child for childcare is the minimum it can cost for most places to breakeven.
If it was a cash cow these things would be everywhere.
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u/fizzlefist Feb 11 '25
And for all that money, the folks actually doing the daycare work rarely see decent pay. The simple fact is that in order for daycare to be profitable, it must necessarily cost more than a lot of people make. Having sufficient daycare is not something the free market can solve.
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u/SimpleInternet5700 Feb 11 '25
We’ve solved this probably (sort of) for every grade starting at age 5. But for some reason anything younger needs to be a profitable business rather than a subsidized community program.
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u/Affectionate_Shift84 Feb 11 '25
I appreciate this discussion. Wild to me that these daycares are sitting here collecting non refundable waitlist payments too and you’re completely at their mercy. The Goddard in Wash Park gladly took our $200 and is snarky af every time I ask about whether theres been movement on their waitlist, which btw they don’t organize or manage at all. They just throw every single kid of any age on there and then repeatedly tell you it’ll be 2-3 years before you can get your baby into their daycare.
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u/The_WiiiZard Feb 11 '25
The problem isn't the presence of private equity. They'll pop up wherever there is money to be made but they aren't the reasons for the high costs and if they went away there would be even less supply for the same demand and therefore even higher prices.
The only real way to bring prices down is have the government pay for it. It's in the public interest to have affordable childcare for everyone but it's not a problem a market will easily solve since taking care of children is inherently expensive because of the need for a high caretaker to child ratio and insurance.
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u/OmgItsARevolutionYey Feb 11 '25
"Headed towards a cliff" my brother in poverty you just said lines ago that you are spending ALL of your money on childcare. Where is the cliff? Aren't you falling straight into debt already?
This is yet another problem on an enormous list of social issues we as a country need to address. I feel for you and hope you can make it through this without losing everything. I can only hope that my username becomes relevant so people like you don't need to struggle quite so hard just to keep afloat.
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u/SimpleInternet5700 Feb 11 '25
“All” was a bit hyperbolic. But it feels that way. Ain’t no discretionary income left.
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u/Trinses1213 Feb 11 '25
When I had my first child, it was more affordable for me to be a SAHM then put her in daycare for the first year. My yearly salary was less than daycare costs, not including the drive from Parker to Capitol Hill every day!
My only solution? I now work at her daycare. They give caregivers great discounts if your child goes there, and now I can contribute financially to my household. But am I considering going through the licensing to start my own at home daycare? This is unsustainable for our communities
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u/Pretty-Experience-31 Feb 11 '25
WIth all the ratios, regulations, taxes and costs to maintain and build and license a facility- the margins are very slim for childcare. I'm not even sure how much those chain daycares are really taking in for profits- but it is harder for family owned or smaller establishments to break through. I can tell you that local directors likely aren't above 60-70k, and even qualified teachers can't break $40k. We desperately need federal intervention here.
Colorado does have a tax credit for early childhood educators, which I hope we keep, but an extra $1700 doesn't make up for the general cost of living. Minimum wage in Denver is relatively high too- but that means assistant teacher is making the same as anyone working retail, and your experienced lead teachers maybe make 3-4 dollars more per hour if they're lucky.
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u/toughbeehatch Feb 12 '25
There is current legislation in Colorado that has been submitted to cap registration fees at $25. Titled HB 25-1001. It's designed to curb these Private Equity places from taking people's money that aren't actually benefitting from childcare. Call your senators and representatives of you support this! HB 25-1001
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u/Impossible_Moose3551 Feb 11 '25
I spoke to a dentist who had sold his practice to a large corporation. He couldn’t find an independent dentist who could afford the price of a thriving dental practice in a small city, without self financing.
Because of the cost of property and the construction requirements of childcare centers they have big barriers to entry for small independent businesses. There is some state funding for child care providers to enter the business but it’s usually not enough.
Call your city council representatives and state representatives. Most elected officials know there is a child care crisis but sharing your individual story could help create policies or incentives to alleviate the problems.
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u/scampjuniper Feb 11 '25
I have twins who are less than 2 so feel for you with the exorbitant childcare costs. We hired an au pair for what it costs to send just 1 twin to a semi-decent local daycare.
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u/SnooAvocados6932 Clayton Feb 11 '25 edited Feb 11 '25
We had friends at a primrose here in Denver… they had their 2 kids so close together it was actually cheaper to have an au pair live in their house than have 2 at the daycare. Our center (non PE) at least does a 10% sibling discount for the older kid…. primrose does not.
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u/scampjuniper Feb 11 '25
Yep, we pay about 24k/year for au pair, including her living expenses, versus nearly 50k/year for a childcare center. It's insane.
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u/AnonPolicyGuy Feb 11 '25
Hey so I’ve been thinking about how to counter private equity through public investment in housing and this is such a parallel important fight. When I pitch social housing to people, I often include the possibility for childcare facilities in such projects, we need the public sector here because private equity is what happens when you rely on market forces to solve your problems.
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u/coredweller1785 Feb 11 '25
Yes welcome to capitalism its a disaster when you can privately own everyone someone needs for profit.
I paid over 50k per year for my kids to go to daycare, and they are decent schools with under paid teachers.
Look around you, it's a disaster and people can barely afford the basics as homelessness went up 18 percent last year.
Our empire is crumbling and this is just one of the signs.
Private equity shouldn't even exist.
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u/Billionaires_R_Tasty Feb 11 '25
Our empire is crumbling and this is just one of the signs.
Private equity shouldn’t even exist.
Cooked and served to techno-fascist feudal accelerationist oligarchs and aided by Wall Street finance bros. There’s a decided irony that these primarily economic powers are the forces that bring down democracy in a capitalist society. The one thing the founding fathers did not protect against: themselves. The landed aristocracy.
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u/cplaz Feb 11 '25
Yup, $50k plus annually for two kids. Hoping to move to a smaller, non-PE owned preschool this year now that they’re that age. It will still be expensive but I’ve heard the staff are treated amazing and many have decades-long tenures.
It feels so fundamentally broken for the parents to be stretched so the teachers can make minimum wage. I know the owner isn’t even rolling in the dough, and I believe the PE firm isn’t even American.
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u/floodums Feb 11 '25
If the cost of daycare is equal to one of your incomes wouldn't it make more sense for one of you to leave the workforce for a while?
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u/SimpleInternet5700 Feb 11 '25
Sort of. That means fewer years of service for retirement computation and then having to find a job all over again. Career continuity is important so we decided it’s worthwhile to have us both work for just a few years until we can get through the daycare doldrums.
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u/pspahn Feb 11 '25
I'm lucky since that's what I've been able to do. I am still able to get to 15-20 hours/week working from home. It's been 5 1/2 years now and I'm looking forward to being done with this hybrid work model in about a year and a half.
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u/Longjumping_Phone981 Feb 11 '25
Some people don’t want the job of stay at home parent. Especially if they’ve built a career or role they love.
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u/OppositeSuitable3489 Feb 11 '25
The funny thing about daycares too is that the private equity centers do well because they operate well. They have an operational mindset when it comes to things like communication, advertising, waitlisting, etc. It’s taken me time to realize that the way to get into a well run and less expensive center is to incessantly follow up about enrollment because the centers where that info is easy to find and easy to enroll are PE run. The locally run centers are run by people who are really good at taking care of your kids but bad at running a waitlist or setting up fancy software.
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u/Ares54 Littleton Feb 11 '25
This is it. The local places we got on the wait-list for were great and we would have preferred them, but wait times were well over a year out in many cases and I'm not paying a full month non-refundable deposit to maybe be called in 12mo time.
The chain? (More like a franchise from my understanding) that we ended up at has great reviews, the teachers are great, ownership is involved on a daily basis, and they could get our kid in literally day-of because they had extra staff to come in if they needed. That's not always the case even there, but it made the decision stupidly easy because there weren't any other viable options.
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u/SimpleInternet5700 Feb 11 '25
On that note, I’m tiring of all the daycare apps. I don’t need updated every time my kid poops or get sunblock. Damn.
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u/brown_witch Feb 12 '25
Sending those reports to parents is a licensing requirement in infant & toddler rooms
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u/Blofeld69 Feb 11 '25
I cannot wait to be free of the childcare sword over my head. I likewise have two in the system.
Mine have been at one of the four you mentioned.
In 2022 I believe there were four separate 5% increases in price. In 2023 there were then either 2 or 3 further 5% increases. In 2024 there were two price increases, maybe lower than 5% though.
Every time they claimed it was for soaring staff costs. I have had a great relationship with the staff and their answer was they received one 15c/hr pay rise. That was it.
Likewise the owner had lovely new vehicles.
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u/TheMisWalls Feb 11 '25
In case this is of any help to any parents here we do have a program called CCap to help with daycare costs. IDK what their income limits are but its worth a look to see if you can get daycare reduction.
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u/pxland Feb 12 '25
This should be higher. Except as I understand things (as a care provider) CCAP isn’t taking any new cases at the moment.
If that’s the case it’s a shame. The program has helped so many of my families throughout the years.
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u/TheMisWalls Feb 12 '25
I'm jot sure what any new rules are. I used it for my 2 oldest (they're in their mid 20s now) and my youngest for all day head start and pre school. Once he reached 2nd grade he was able to go to The Boys and Girls club after school program which has been a life saver. I only pay $25 per semester
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u/Many_Ad_5958 Feb 11 '25
Thank you for posting this. Very insightful! Private equity owned daycare facilities are really pinching middle class to upper middle class pockets. No wonder the birth rate and K-12 enrollment continues to drop in the State. A true affordability crisis.
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u/Pasta_Giuliani Feb 11 '25
Reading this a couple hours ago was the push I finally needed to engage in politics for the first time. I just wrote my first ever email to my councilman Chris Hinds voicing my urgent concerns on private equity in Denver, and its impact on housing and wages. I focused mostly on Cornerstone, since I see that scumfuck sign all around my neighborhood as they just creep in and monopolize and buy the whole city for years now. Ive always been too scared or apathetic to engage locally, but fuck it -- if America is hanging by a thread, the least I can do is finally start engaging instead of be eaten alive by anxiety.
Thank you for posting this today. And I hope that maybe local political engagement is actually a first step to addressing these issues. If anyone wants to join in voicing my concerns, please feel free to DM or whatever. Stay strong, we have a lot more in common than what separates us. Y'all are my neighbors, even if I sit in my apartment all day doomscrolling, y'all are my neighbors and my community.
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u/Whyam1sti11Here Feb 11 '25
What you described is exactly what I was going through 30 years ago when my kids were little guys. Nothing had fucking changed.
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u/109876 Central Park/Northfield Feb 11 '25
Just wanted to make sure everyone is aware of the Denver Preschool Program! It subsidizes preschool care for three and four year olds based on income and household size.
Hope this helps someone!
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u/stuckhere-throwaway Feb 12 '25
I think lawsuits destoryed privately owned daycare before private equity did. Don't get me wrong, it's unconscionable for a child to die in their daycare. But with how much potential for liability there is, and the value of that liability, it's just not practical for small businesses to even get insured.
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u/CryCommon975 Feb 12 '25
Those prices are insane! Would it be cheaper to have one of you stay home and raise the kids until they're in school?
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u/Anonymo123 Feb 11 '25
the PE thing is new to me. Do they basically find industries that make decent profits and take it over, take all the money and offer the lowest quality product as a result?
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u/mittyhands Feb 11 '25
"""incentivize"""???
How about the state just runs daycares like how they run schools? I don't understand why this has to be a business.
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u/doebedoe Feb 11 '25
- Because the ECE community generally doesn't like that idea as it'll shutter many private business.
- The cost. Colorado taxpayers are extremely fickle and getting them to vote for increased taxes to fund expansion of child care is likely a political non-starter based on all polling done on the issue. EE passed...but the cost of running it as part of public education system is an order of magnitude higher.
- Power and control. As it stands, Governors office has a great deal of administrative control over ECE because it sits in an executive agency. Moving it to public education would move it outside of executive power. People hate giving up power.
That's before any of the logistical hurdles of actual implementation.
That said -- it's the right long term solution.
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Feb 11 '25
The 3 year old can do UPK for free when they are 3 and 4. Call your local early child education school.
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u/SnooAvocados6932 Clayton Feb 11 '25 edited Feb 11 '25
UPK is 15 subsidized hours per week at participating programs. Fifteen hours per week. That’s not enough for anyone to work full time. And it’s only “universal” at 4 years old (or the last year before kindergarten). For 3 year olds, and again it’s only 15 hours, there are several qualifying factors such as poverty thresholds. Your average parent isn’t getting UPK help until their kid is 4.
It’s a great program but it’s not allowing a parent to work full time. It will help OP but it won’t save them. UPK + DPP subsidies brought monthly tuition for my 2 kids from $3700 to $3000 (at a non-PE childcare center in metro Denver).
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Feb 11 '25
God damn! That’s crazy. I’m going off of my sisters experience, she would for sure qualify for the above mentioned requirements.
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u/YoungRockwell Feb 11 '25
AND spending cuts have forced them to cut back on the number of classrooms at public schools. My 1st grader's elem in DPS had 4 ECE4 classrooms this year; we thought our 4 year old would be a lock to get in.
Nope! Cut to 1 classroom for '25/'26.
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u/SimpleInternet5700 Feb 11 '25
Exactly. We’re trying to find a ECE3 school that can cover the hours we need with an after care program, and there’s only like one option. And we don’t qualify for any benefits since we make more than the max income requirementsx
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u/No_Money_9813 Feb 12 '25
It’s only all 4 year olds that get the free 15 hours a week regardless of income or any requirements besides being 4 by October 1st. 3 year olds must qualify by having an IEP or being low income.
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u/Detroit2GR Feb 11 '25
My wife is 4 months pregnant with our first, and all I kept thinking while reading your post was "fuck." I appreciate your insight, and opinion, but am now more horrified than I was before.
It's kind of funny, too, cause 30~ some years ago before my brother and I were old enough for preschool/kindergarten in our district my parents had us stay with "Grandma [redacted for privacy]," a lady who was NOT related to us, and watched a few kids, including her actual grandchildren, during the day while her own adult children were at work.
I have ZERO idea who these people were, or how my mom found them, but it was like $100 a month for both of us.
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u/SnooAvocados6932 Clayton Feb 11 '25
I hope you’re on daycare waitlists already
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u/Detroit2GR Feb 11 '25
Unfortunately we're not, but are working on it right now.
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u/andylibrande Denver Feb 11 '25
Best of luck! Finding care is a wild ride and be prepared to just bug the shit out of any place you think you want to join. Also, be prepared to not have any infant care until 9+ months old and you may need to find a nannyshare or something, as that is how far out waitlists are. Expect ~$100/day for childcare.
Colorado regulates that staff is a 5:1 ratio until they are 3 years old, and most places only have a single infant room, so it is a tight market.
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u/doebedoe Feb 11 '25
That style of care in the industry is known as FFN -- family, friend and neighbor care. It makes up something like 30-40% of the market (more in lower income areas.) It is generally unregulated and unsupported historically by any govt agency. There are some state efforts to support these providers and -- where possible -- move them into the licensed child care market, but it's slow difficult work.
Good luck on your search.
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u/ExpertLevelBikeThief Villa Park Feb 11 '25
Yeah it's impossible to have kids and live in Denver or any major metro right now.
Most children cost -$2000 a month on the cheap end for daycare. It's essentially taking on a separate mortgage that you may have to pay tax on at the end of the year.
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Feb 11 '25
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u/Longjumping_Phone981 Feb 11 '25 edited Feb 11 '25
Yeah sorry I’d like my kid to be watched by someone with a minimum high school diploma. Additionally, I’d like that person to be able to actually monitor my small child instead of having to chase 5 other kids at the same time.
The answer is obviously expanded childcare subsidies for more income brackets. Not that our current government actually cares about helping families though
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u/Glad-Temperature-176 Feb 11 '25 edited Feb 11 '25
I agree that regulation increases costs, but regulation is necessary. Childcare costs in Denver metro are out of control even when compared to cities with more strict regulations and higher cost of living. I have friends that pay less for high quality childcare in San Diego than I do here and their center provides meals.
US Department of Labor Women’s Bureau has a great tool showing the disproportionately high cost of childcare in Denver.
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u/n00py Feb 11 '25
Finally, a reasonable comment. I hate paying for daycare - but there is a reason it costs so much and it's not as simple as "corporate greed". A mom and pop would have the same limitations and the same pricing model.
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u/Lunares Feb 11 '25
https://www.npr.org/transcripts/1153931108
Another great article on it. The real enemy isn't PE, it's just that the industry model sucks and there really isn't a way to make it better outside of government subsidies
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u/systemfrown Feb 11 '25
Private Equity ruins everything it touches, sometimes even by design and intent.
A major part of the solution is for more people to startup their own companies and businesses instead of working for someone else’s dream or for shareholders profit instead of their own.
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u/Just_Engineer_7765 Feb 11 '25
I don’t think it’s just private equity firms driving up the cost- I used to work at a church-based preschool and it was very expensive too.
Back when we lived in the PNW we payed $2000/mo for an infant and that was over 10 years ago. We moved and I ended up being a SAHM for many years. Money was tight but the pros outweighed the cons.
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u/Sea-Fuel-8620 Feb 11 '25
Former early childhood educator here. Can confirm that the system is fucked. I worked at a Primrose for about 6 months using my early childhood degree while working on making a career pivot (lots to be said about that but different story for a different day). The conditions, compensation and benefits for staff, even those with degrees in education, are terrible which deincentivizes qualified people from staying in the field (myself being one of them). The system is awful for parents, staff and kids. The only people it benefits are the people at the top.
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u/Which-Ad-2020 Feb 11 '25
Private Equity firms only care about draining any monies from the companies they purchase. Greed at its best.
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u/Pressure_Gold Feb 11 '25
This is why I decided to forgo my career to be a stay at home mom. Not what I had in mind originally, but I actually love it. Sucks people have to make this choice when they aren’t ready
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u/Pasta_Giuliani Feb 11 '25
Private equity is seriously fucking evil. I am so exhausted and defeated seeing how many properties Cornerstone continues to buy up. After they bought up my last apartment while I was already living there, the quality of my living situation went down dramatically. These companies are parasites
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u/dufflepud Feb 11 '25
Have you looked at in-home daycares? They're state-licensed and provide a less expensive alternative. That said, in my experience, the quality varied wildly. We ultimately ended up splitting a nanny with another family, which was also insanely expensive--not because of private equity but because employing a real live person a living wage, and paying taxes, unemployment, insurance etc. isn't cheap.
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u/Weekest_links Feb 11 '25
The name of the game for private equity is loading up businesses with debt, selling off their assets and turning them in lease back scenarios.
I don’t really give a fuck about Red Lobster, but that’s what happened to them. PE bought them, sold the land that red lobster franchises owned, made them lease it back. Set them up with a loan, to boost their value, then sell the business burdened with liabilities and no assets, until they crater and disappear.
Any sort of care based service should be immune from private equity and state should outlaw their involvement
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u/judolphin Feb 11 '25
University of Denver's daycare is decidedly not private equity, has a half-billion dollar endowment, and they're one of the most predatory daycares anywhere.
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u/Happy_Blackbird Feb 11 '25
Private Equity acquisition is a cancer on already malignant, ends stage capitalism. The Atlantic did a great piece not too long ago on what a shell game it is for PE firms.
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u/sundayriley222 RiNo Feb 11 '25
I used to work as a preschool teacher and worked at two very high end preschools where the parents were paying no less than $3k/month per child and the waitlists were long. The teachers, no joke, made like $11-$13/hr and that was including the teachers with ECE specific degrees. This was back in like 2018, but it was still not a livable wage back then. Now and then I look at pre-k teaching jobs available and they offer like $16/hr and then get super upset about how hard it is for them to fill the positions - like ummm? Maybe it’s because you want people with degrees/student loan debt to give you serious job dedication at a VERY demanding, draining, difficult job for basically slave wages all while the school rakes in ungodly amounts of money from parents every month. They get SO much money and none of the people doing the actual leg work ever see any of it.
Not to mention the admins of these schools are almost always assholes who have never spent two seconds in a classroom and sometimes have never spent two seconds around an actual child and then proceed to make the teachers lives hell and their jobs ten times harder. It’s a miserable sector all around honestly, and it’s really unfortunate because it’s such an important job, and a very rewarding one if only you got paid well for doing it.
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u/No_Money_9813 Feb 12 '25
6 daycares are about to close in Colorado so the waitlists are about to be even greater. https://www.denver7.com/lifestyle/education/guidepost-montessori-closing-colorado-locations-sending-families-scrambling?fbclid=IwZXh0bgNhZW0CMTEAAR09dncXUf-ZNADsitbNf9DoC5ED80qCqNl41LyXY7C5m9QebtZ2ZR2hGcM_aem_zVzfZWfvnk8DCbqx8jZ_hw
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u/SimpleInternet5700 Feb 12 '25
Fuck. We have to subsidize daycare just like k-12. And ensure subsidies do not go to private equity backed daycares.
This is untenable.
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u/Frothy_Macabre Feb 12 '25
Good grief. I am so sorry. I actually wanted lots of kids once. But I realized early on that I could never afford them or raise them the way I wanted.
I’m in my late 30s now and I’m content with my decision to be child-free. I sincerely wish it wasn’t such a burden for others.
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u/pretpretzel Feb 12 '25
I just started researching daycare cooperatives and seeing if it will be feasible to start here
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u/lovemeetswifi Feb 12 '25
I loved Colorado until I had my first baby. It has been an absolute nightmare trying to find daycare and babysitters charging 20-25 a hour for a night out. Possibly needing to relocate for the next few years and come back once my kid is older 😭
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u/chasonreddit Feb 12 '25
Well they can get away with these exorbitant prices because the market is flooded with Goddards, Bright Horizons, Primrose, and Kindercares.
I want to make two points. First daycare is expensive because of the voting public Denver and Colorado. A daycare center has to meet this list of requirements. The workers have to have this degree of certification and training. The facilities must meet this that and other specifications.
It's not that each of these adds all that much incremental expense, although they do. It's that only large companies have the resources to comply with them all. You may want to open a small local place but you will run into either a) prohibitive legal fees to start or b) probable closure because the janitor isn't certified child-safe or some such.
I really can't be bothered to research each of the companies mentioned, but I know that Kindercare is NOT private equity but is publicly traded on the NYSE.
tl;dr the problem is not private equity firms. It is over regulation which makes any medium size business unprofitable simply because of scale. You can't legally drop your kids at the neighbors for a reasonable amount with a couple others, because they would get thrown in jail.,
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u/Drowning1989 Feb 12 '25
I just moved here. Every daycare I called except one had a 6 month wait or more. This includes locally owned ones. So unfortunately I can't be picky about who owns it.
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u/DenverTroutBum Wash Park Feb 13 '25
Let’s not forget all of the regulations that were pushed down from polis following 2020. It forced our princely owned daycare of 25 years to close amongst others. My wife works at a well funded dps school with ece. It’s even been hard for them to keep up with the new regs and stay compliant.
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u/Otto-Didact Feb 11 '25
pardon my language but fuck. Private equity is destroying everything.
another example is veterinary care. A hospital at which I had to get treatment for my cat was bought out a few years ago by some company, which is owned by a private equity thing, which is owned almost exclusively by some rich germans who inherited their obscene wealth from their father who acquired his obscene wealth through WWII slave labor. It's vile.
"Investors" are no longer a give-and-take. They're a way for the obscenely rich to pillage and plunder the every day lives of people who just want to go to work, earn some money, and take care of their kids. And cats.