Part III: Housing affordability for early childhood educators in D.C.

This report is the third in a three-part series that examines housing challenges for D.C.’s essential workers using the example of early childhood educators.  The report’s key findings highlight that housing costs are too high for early childhood educators, making a second income necessary to afford housing expenses, although minimum wages required by D.C.’s Pay Equity fund do narrow the gap. However, many educators do not have access to this additional financial support and are priced out of housing in the District. For the purposes of this study, the term “early childhood educators” refers to educators who are working with infants, toddlers, and preschool-aged children in child-facing roles at child development centers licensed by the Office of the State Superintendent of Education (OSSE).

Part I in this series looks at where early childhood educators work. Part II examines where early childhood educators live, which is often driven by affordability of housing, even if it means longer commute times. Part III closes with implications for what types of housing early childhood educators can afford given their earnings, and where housing affordability for early childhood educators exists in D.C. It also estimates the amount that would be necessary to close the housing affordability gap in D.C. for these educators.   

This report is a part of a larger project at the D.C. Policy Center that examines how employers, philanthropy, and the government can create a scalable solution that can provide affordable housing for essential workers, especially those who are at the beginning of their careers.

Other reports in this series:

Part I, Where do early childhood educators work? 

Part II, Where do early childhood educators live? 

Priced out: Where can D.C.’s essential workers afford to live? 

Early childhood education is crucial in supporting the workforce and preparing children for school. But the sector pays relatively low salaries: In 2023, early childhood educators in D.C. earned an average annual wage of $41,540,¹ only 39 percent of the city’s annual per capita income for that year.² This low pay makes it difficult for early childhood educators³ to live in D.C. and near their workplaces. For example, a typical one-bedroom apartment as of 2023 costs $1,709 per month,⁴ making it affordable for those with a household income of $68,360 per year. This is $26,820 more than the typical wages for an early childhood educator in D.C. 

More broadly, workforce housing is a significant challenge in the District of Columbia. Many service sector workers, especially those in essential roles such as teachers, early childhood educators, police officers, firefighters, healthcare workers, and hotel and restaurant workers, struggle to find affordable housing in D.C. Their modest salaries, coupled with the relatively high cost of housing in the District. often force them to choose longer commutes for cheaper housing. This means many essential workers, despite supporting the basic functioning of the city, are priced out of the District.

In 2023, 59 percent of the District’s early childhood educators lived in D.C. according to data from the Office of the State Superintendent of Education (OSSE).⁵ According to data from the American Community Survey, this share varies for other essential professions: 33 percent of hotel workers, 44 percent of healthcare support workers, 36 percent of police officers, and 70 percent of kindergarten teachers lived in D.C.⁶

Data notes 

D.C. Policy Center undertook this analysis with the purpose of better understanding where District early childhood educators live and work, what budget constraints they may face in finding affordable housing close to work, and how this differs by demographic group.  

The Office of the State Superintendent (OSSE) shared data on early childhood educators with the D.C. Policy Center to support the D.C. Policy Center’s efforts to analyze and address the research questions of this report series. Data shared by OSSE included residential address, work address, supplemental payments that early educators received from the Early Childhood Educator Pay Equity Fund in FY 2022 and 2023 (when OSSE distributed payments directly to early educators via an intermediary), full- or part-time status, and job title. 

For household sizes and incomes of all workers, the model used 2022 five-year IPUMS data from the American Community Survey (ACS). The model assumed rents would be affordable if they were under 30 percent of estimated household income for the corresponding apartment size. 

Salary data from the Bureau of Labor Statistics is often more accurate than ACS data for single workers. However, as only 17 percent of essential workers lived alone, the model used ACS household income data to determine whether workers in essential worker occupations would be priced out of D.C. 

On average, one-bedroom apartments are not affordable to early childhood educators unless they have access to a second income.

The Department of Housing and Urban Development (HUD) defines affordable housing as costing less than 30 percent of a household’s income. As noted, in 2023 the rent for a one-bedroom apartment in D.C. was an estimated $1,709 per month (or $20,508 per year),⁷ which is the equivalent of 49 percent of the average wages of an early childcare worker, making it difficult for them to afford average rent on their own. 

To take a more meaningful look at housing costs, the D.C. Policy Center created a model in Priced out: Where can D.C.’s essential workers afford to live? to estimate affordability based on household size. For estimates of the share of D.C. workers and essential workers who can afford to live in D.C., the model assumes that a single household would occupy a studio apartment, a two-person household would occupy a one-bedroom apartment, a three-person household would occupy a two-bedroom apartment, and a four-person household would occupy a three-bedroom apartment. 

In this model, the average household income for a two-person household headed by a D.C. early childhood educator is $67,076 if they rent (see the interactive chart below).⁸ This household would be able to afford at most $1,677 of rent per month without being rent-burdened, assuming the household pays 30 percent of their income on rent ($20,123 annually divided by 12 to estimate the monthly payment). This income allows them to afford a one-bedroom apartment in Wards 4, 7, and 8, but prices them out of the remainder of the city. In addition, among those working in D.C., early childhood educators have an average household size of 2.7 people and may want more space in a two- or three-bedroom apartment, for example.⁸ For these households, two-bedroom apartments can be affordable across the city except for Wards 1, 2, and 3, but three-bedroom apartments are out of reach across all Wards.

However, about half of early childhood educators do not live with a spouse or partner

In 2022, about half (54 percent) of early childhood educators who worked in D.C. did not live with a spouse or a partner,⁹ and on average they had a household income of $31,500 (this is lower than the annual wage of $41,540, and may be due to average hours worked being less than 40 per week, going in and out of the workforce, or other reasons).¹⁰  This means early childhood educators without a second income would be able to afford an estimated rent of $789 per month as of 2022. At this rate, even if they considered only studios, early childhood educators would be priced out of all wards in D.C. based on the D.C. Policy Center model.

What kind of wage-premium would be needed to make housing affordable?

Examining housing affordability in terms of gaps between market wages and rental costs is relevant in light of the District‘s efforts to increase early educator compensation through the Early Childhood Educator Pay Equity Fund (see Spotlight).^11 12

Spotlight: Early Childhood Educator Pay Equity Fund

The Early Childhood Educator Pay Equity Fund is a unique program, authorized in DC Code and administered by OSSE, to increase compensation of early childhood educators with the objective of promoting equity with similarly skilled educators across the P-20 continuum and helping childcare programs recruit and retain staff. As of 2023, childcare employers (providers) who opt into the fund receive District funds, via a funding formula, to increase compensation of eligible early childhood educators and, in exchange, must pay eligible early childhood educators regular wages or salaries that meet or exceed minimum required salaries, by role and credential, established by the fund. Through the funding formula, childcare providers may receive between $5,247 and $29,344 per early childhood educator to supplement wages, depending on their role and credential.¹³

In FY 2025, for example, the minimum salary for a Lead Teacher with a Child Development Associate credential (CDA) is $51,006 per year and $63,838 with an associate’s degree in Early Childhood Education (ECE) or qualifying coursework.¹⁴ There is also a waiver available for employers who increase salaries but are unable to meet the minimum set by OSSE. In FY 2024, the fund distributed over $67 million to participating childcare providers and provided $18 million for HealthCare4ChildCare, an innovative approach to subsidize health insurance coverage for childcare employers and District residents working in childcare through the D.C. Health Benefits Exchange.

Based on D.C.’s FY 2025 approved budget, the District has allocated $70 million to continue implementation of the Early Childhood Educator Pay Equity Fund through participating childcare employers in FY 2025. The payments as of FY 2024 go to the childcare providers who agree to participate in the program and pay minimum salaries established by OSSE. This funding level, which includes $12 million for HealthCare4ChildCare, is lower than the FY 2024 funding level, which means that payments to participating employers, and minimum salaries for some eligible early childhood educators will need to be reduced in FY 2025, based on recommendations of the Early Childhood Educator Equitable Compensation Task Force. 

Fiscal year 2025 Update: Housing affordability and minimum salary requirements for Child Development Facilities. 

Comparing the FY 2025 minimum salaries for which early childhood educators qualify through the Early Childhood Educator Pay Equity Fund to the income needed to afford a one-bedroom apartment shows that the Pay Equity Fund wage supplements do not, on average, close the gap needed for housing affordability even in a household of two for a full-time early childhood educators (for example, one parent living with one child)—unless the early childhood educator has a bachelor’s degree in Early Childhood Education (ECE) or a bachelor’s degree with equivalent coursework. Across all credential types, an early childhood educator would need $20,508 to afford a one-bedroom in D.C., with a gap in affordability varying from $5,206 for an assistant teacher with a CDA to a surplus for a lead teacher with a bachelor’s degree or higher. Importantly, the lowest-paid early childhood educators, those who have less than a CDA, are no longer included in the Pay Equity Fund.¹⁵ Although the Pay Equity Fund improved housing affordability, the majority of early childhood educators still cannot afford to live in D.C. unless they live in a house with multiple incomes.

For housing to be affordable for workers, additional supports are needed  

Housing affordability is not just a challenge for early childhood educators in D.C., but also for other residents and essential workers. The D.C. Policy Center analysis, Priced out: Where can D.C.’s essential workers afford to live?, shows that approximately 57 percent of households in D.C. are renters, and on average gross rent for all renter households is 38 percent of their annual income. Approximately 32 percent of these households spend more than 30 percent of their income on rent, and one in ten spends more than half of their annual income on rent.  

In 2023, D.C.’s workforce included an estimated 104,710 essential workers, who have higher rent burdens. The data show that for studio apartments, over 50 percent of single-person households cannot afford rental units in Wards 1, 2, 3, and 6. Even in the relatively lower-rent Wards 7 and 8, 41 percent and 48 percent of households are priced out, respectively.  

In an effort to address these affordability gaps, the D.C. Policy Center is developing an affordable housing model called inclusionary conversions. Primarily through employer engagement, the model aims to efficiently and affordably create housing units in high-cost areas where government-funded affordable housing has been difficult to produce. This approach can create units at a fraction of the cost (for example, an average of $8,000 for a one-bedroom annually as shown the gap figure above) and time of traditional programs by replacing complicated financial transactions with leases and contracts. The main target for this model is workforce housing, such as for teachers, early childhood educators, and healthcare workers, but it can also be applied to create affordable housing at various affordability levels. 

1. Wage data are sourced from May 2023 Occupational Labor and Statistics Survey.
2. U.S. Census Bureau. 2023. “QuickFacts: District of Columbia; United States.” Retrieved from https://www.census.gov/quickfacts/fact/table/DC,US/PST045222 and adjusted for inflation using the Consumer Price Index (CPI) from the Bureau of Labor Statistics (BLS) for 2023 (for more information, visit https://www.bls.gov/opub/ted/2024/consumer-price-index-2023-in-review.htm 
3. For the purposes of this analysis, early childhood educators are defined as those working with infants, toddlers, and preschool ages in child-facing roles at child development centers licensed by the Office of the State Superintendent of Education (OSSE).
4. Rent data are calculated by averaging all ward one-bedroom apartments in D.C. using CoStar data.
5. Data from OSSE. For details, see Coffin & Mason (2024) “Early Childhood Educators in D.C. and Housing: Part II, Where do early childhood educators live?” Available at https://www.dcpolicycenter.org/publications/early-childhood-educators-in-d-c-and-housing-part-ii-where-do-early-childhood-educators-live-part-ii/
6. These numbers use data from two different sources to estimate the share of workers who work in the city and live in the city for a given occupation. The number of workers working in the city in each occupation is from the May Occupational Estimates from Bureau of Labor Statistics. The number of workers who are in a given occupation and who live and work in the District of Columbia are obtained from the American Community Survey.
7. Data are sourced from CoStar, a private real estate company specialized in real estate research, to examine the prevailing rents in 2023 across multi-family apartment buildings. However, the Costar database does not track all rental apartments in D.C. 
8. Sayin, Y. and Calma, E. 2024. Priced out: Where can D.C.’s essential workers afford to live? D.C. Policy Center. Retrieved from https://www.dcpolicycenter.org/publications/priced-out-where-can-d-c-s-essential-workers-afford-to-live/
9. Ruggles, S., Flood, S., Sobek, M., Backman, D., Chen, A., Cooper, G., Richards, S., Rodgers, R., and Schouweiler, M. IPUMS USA: Version 15.0 American Community Survey 5-Year Estimates, 2018-2022. Minneapolis, MN: IPUMS, 2024. Retrieved from https://doi.org/10.18128/D010.V15.0
10. American Community Survey 5-Year Estimates, 2018-2022. It is important that BLS reports an average annual salary of $41,450 for this occupation.
11. Office of the State Superintendent of Education Pay Parity Program for Early Childhood Educators Authorization Emergency Amendment Act of 2022. (2022). Retrieved from https://lims.dccouncil.gov/Legislation/B24-0632
12. Office of the State Superintendent of Education (OSSE). 2022. “Early Childhood Educator Pay Equity Fund.” OSSE. Retrieved from https://osse.dc.gov/ecepayequity 
13. Office of the State Superintendent of Education (OSSE). 2024. Child Development Facility (CDF) Payroll Funding Formula: October 2024 Update. OSSE. Retrieved from https://osse.dc.gov/sites/default/files/dc/sites/osse/publication/attachments/Updated%20CDF%20Payroll%20Formula%20English.pdf 
14. Office of the State Superintendent of Education (OSSE). 2024. “Early Childhood Educator Pay Equity Fund Minimum Salaries for Fiscal Year 2025 (FY25).” OSSE. Retrieved from https://osse.dc.gov/sites/default/files/dc/sites/osse/publication/attachments/Minimum%20Salaries%20for%20FY25%20English.pdf 
15. Office of the State Superintendent of Education (OSSE). 2024. Early Childhood Educator Pay Equity Fund: Minimum Salaries for Fiscal Year 2025 (FY25). OSSE. Retrieved from https://osse.dc.gov/sites/default/files/dc/sites/osse/publication/attachments/Minimum%20Salaries%20for%20FY25%20English.pdf