Good afternoon.

Welcome to the New York City Council hearing for the Committee on Small Business jointly with the subcommittee on early childhood education.

At this time, we're gonna ask everyone in the room to silence all cell phones and electronic devices.

If you wish to testify, you need to fill out an appearance card.

If you haven't done so yet,

uh

please see the sergeant at arms in the back of the room, and we'll get you signed

up.

Most importantly, at this time, no one is allowed to approach the dais.

Chair, you may begin.

Good afternoon, everyone.

I am Councilmember Chanel Thomas Henry, Chair of the Committee on Small Business.

Thank you for joining us for today's joint hearing between the Committee on Small Business and Subcommittee on Early Childhood Education to examine the business of child care.

I'd like to begin by thanking my co-chair, Councilmember Jennifer Gutierrez.

I'd like to also thank the representatives from the administration, members of the public, and my council colleagues who have joined us here today, including Councilmember Santoso, Joseph, Felder, and Brewer.

And on Zoom, we have Councilmember Maloney.

The last couple of years, we've seen conversation grow significantly around child care in New York City.

This year, the mayor, the governor, and the council have focused their efforts to examine the landscape of child care and approve its affordability and accessibility for New York City families.

Part of this examination is considering who would provide child care.

And that is why today's hearing is so important.

New York City small businesses are significant providers of child care, and ensuring that they have the resources and guidance to conduct their business is crucial to meeting the affordability needs of New York City families.

According to a 2024 report from the U.S.

Small Business Administration, nearly all firms in the child care industry are small businesses.

But most of the child care firms that have exited the market have been small businesses.

The growing cost of the industry has been an overwhelming burden for small businesses, and this 2024 report further noted that the price of child care grew by 230% from 1990 to 2022.

Many serve as unofficial community centers or were started by someone who was born and raised in the neighborhood.

Businesses can begin because of deep need to give back to the community or share a passion, but starting a small child care business takes a unique amount of work.

There are many complex requirements that a child care business must meet, in addition to a mirrored rules and regulations that all small businesses must follow in New York City.

The costs and the complexity of starting and sustaining a child care business cannot be understated.

And we must find ways to appropriately streamline the business of child care if we truly want to make child care affordable.

The committee is also hearing introduction 445 from Councilmember Stevens, which requires the Department of Small Business Services to expand the business pathways program to include creative fields, retail, and cosmetology.

The programs would assist NYCHA residents in formalizing their businesses, including via professional business education course, mentorship, and professional coaching.

Support in obtaining business licenses, guidance on business operations, marketing and financial structures, funding to complete required health and safety trainings, support in completing provider applications and help for certain businesses to secure a commercial space.

Public information about this program is limited, including who is presently responsible for running the program, and we look forward to hearing from the administration about this program and their thoughts on council member Stevens Bill.

I would like to thank Tyla Walls and Rebecca Borrillo from Central Staff for their work putting this hearing together, as well as my own staff, Derek Slaughter, Franklin Richards, and Sierra Smith, and everyone working in the background to help make this hearing possible.

I'd also like to mention, I believe we were

joined by Councilmember Moreno.

Morano.

Yes, I'm coming.

Okay.

He's here somewhere.

All right, we'll find Councilmember Morano shortly.

In the meantime, I will turn it over to my co-chair, Councilmember Gutierrez for remarks.

Thank you, Chair.

Good afternoon, everyone.

I'm Councilmember Gutierrez, Chair of the Subcommittee on Early Childhood Education.

We're so excited to join the Committee on Small Business.

Um, and their chair, Councilmember Chanel Thomas Henry for today's oversight hearing on the business of child care.

Over the last several months, as chair of the subcommittee, I've had the privilege of hearing directly from families about how reliable, affordable child care plays an integral role in their lives.

Yet the people who run child care programs are caught in an impossible squeeze.

Child care providers are asked to deliver high quality, safe, and nurturing environments on razor thin margins.

They are competing in a market where the service is expensive for families to buy and the wages they can afford to pay their staff remain far too low.

As former Treasury Secretary Janet Yellen described, the childcare industry is the textbook example of a broken market.

The majority of child care businesses are small business and are owned and operated largely by women and often women of color.

Most are working hard and following the rules to keep their child care business open, but this can often feel impossible.

National data shows that most for for-profit childcare facilities operate on a profit margin of less than 1%, well below the recommended healthy margin of 15% seen across most industries.

This means if an unexpected cost pops

up,

like a broken fridge or plumbing backups or water heater failures, it can often it can often be a devastating, can be devastating to the financial stability stability of that child care program.

This year, Mayor Mamdani and Governor Hokel made a big investment in expanding the child care system, but improving child care access for families is not just about making child care more affordable.