Are HOAs a roadblock in addressing the child care shortage?

In the past several years, Thomas Leonzal has become familiar with the power of home ownership associations (HOA), and what he considers their “overreach” when it comes to changing bylaws that affect residents.  

Leonzal and his wife used to run a daycare in their home, which was part of the Dancing Waters development in Woodbury. After around eight years of operating, in 2019, they received a letter from the HOA that put their daycare at risk of no longer being able to stay open.

The letter said they needed to reduce the number of kids in their daycare from 11 to two within 30 days. For them, doing that meant telling more than a handful of parents that they would need to seek alternative child care.

“I’ve got parents that are depending on us. We’re open from seven in the morning till five at night. They need to know that we’re there because they’ve got obligations to their work,” Leonzal said. “I just can’t spring on them that ‘We can only have two students and send them on their way.’” 

And there was a financial penalty if they didn’t abide.

“(The letter) said, ‘We realized you have a daycare. You have 30 days to get your daycare down to two students or we will fine you $200 a day for every violation,’ and I was like, ‘What?’” Leonzal said. “Because they had changed the bylaws.”

He pushed back with the HOA and argued that existing state laws allow in-home daycare to be considered a permitted single-family residential use of property for the purposes of zoning and other land use regulations. By that state law, in-home daycares could have up to 14 kids. 

Unable to win the fight against the association, Leonzal and his wife moved to another house in Woodbury that was outside of an HOA, so they could keep their business running. He then reached out to his state representative about the issue because he didn’t want this happening to others. 

Need for child care options

Data shows that child care provided in homes, known as family child care, has been declining steadily across all regions of the state. Minnesota has lost half of its family child care capacity since 1999, according to the Center for Rural Policy & Development. 

In many areas, like Woodbury, for example, in-home child care is in high demand. One provider who asked to be unnamed due to current conversations with their HOA, and who lives in a different Woodbury HOA community, is facing a similar issue to Leonzal. She runs an in-home daycare and was recently informed that her daycare was brought up by someone during a board meeting where someone argued it was a business and therefore is against the HOA bylaws. 

But she and her husband feel that the laws should protect those who are providing family child care. In May there will be a vote on whether to exclude daycares from being considered a business in that bylaw, which if it passes, they will be able to keep operating out of their home. 

Related: Little Falls hospital, school district jump into the child care fray

The family said neighbors have never had any issues with there being a daycare in their community. Right now, their daycare cares for seven kids, although some of them come at varying days of the week. Two of those children are their neighbor’s kids. 

If the association doesn’t pass the exclusion of daycare as a business, the family has planned for an alternate way to continue child care. In that case, the provider will team up with a friend who lives outside a HOA and apply for a different license type where they can both operate out of the other person’s home. 

This family considers itself lucky because the HOA hasn’t sent a formal letter yet and the daycare isn’t a primary source of income. They know others have had it worse. 

“(One family) used to live on this side of the metro; they basically moved to the other side of the metro just to be able to continue to do the child care,” the daycare operator’s husband said. “That’s very expensive to do.” 

A bill authored by Rep. Amanda Hemmingsen-Jaeger, DFL-Woodbury, seeks to prevent what happened to Leonzal. Her bill limits a private entity’s (including a HOA) ability to restrict homeowners from providing child care when licensed. 

“It’s important because we’re addressing the child care crisis. I don’t think it’s very fair that we have these arbitrary HOA restrictions, shutting down family child care operations when we need every child care provider we can get,” Hemmingsen-Jaeger said. “These are providers that are providing very vital services. They’re caring for our kids so that parents can be able to go to work.” 

She presented it to the House Children and Families Finance and Policy committee in March and it was met with support.

“This really should not be the intent of what HOAs are,” said Rep. Nathan Nelson, R-Hinckley during the hearing. 

“It seems crazy that we would not allow folks to care for children in this way and utilize their space,” added Rep. Carlie Kotyza-Witthuhn, DFL-Eden Prarie.

The bill is eligible to be on a floor calendar for a second reading and has been laid over for consideration to be included in an omnibus bill. In the Senate, it has a hearing today in the Judiciary and Public Safety committee. 

A growing issue

HOAs are becoming more common. According to census data, 76% of new single-family homes sold in 2022 in the Midwest were in an HOA, compared to 48% in 2012.

As of 2023, Minnesota had roughly 7,950 housing communities — or approximately 620,000 units belonging to a HOA. 

The Department of Human Services (DHS) doesn’t track how many in-home childcare providers operate out of a homeowners association. However, the Woodbury provider’s husband said that when they reached out to DHS about their problem, a DHS employee told him that the state agency had received many messages from providers experiencing the same roadblock.

In a statement to MinnPost, DHS expressed that the bill language aligns with an existing state statute that says a licensed family day care facility “shall be considered a permitted single-family residential use of property for the purposes of zoning and other land use regulations.”

“There seems to be an extension of what I call overreach in HOAs, and this happens to be one of them,” Leonzal said during the House committee meeting. 

Related: Worker shortage among the challenges of providing child care in Minnesota

The family provider in Woodbury feels that amidst a child care shortage, more in-home child care should be encouraged – and the more HOAs limit in-home child care, the worse the shortage becomes. 

“We’ve gotten messages (like) ‘We’re planning on having kids next year sometime. Can we reserve a spot?’ Or ‘We just found out we’re pregnant. Can we have a spot in 14 months?’ And they’re willing to reserve spots because there’s such a shortage,” the provider’s husband said. 

Their HOA is voting on their specific daycare in May, but he feels that state regulations preventing such bylaws are needed to protect others whose associations might be more strict.

“We might be lucky because…if they say ‘Hey, we don’t mind, we’ll change the bylaw. That’s OK.’ Well, then great. But that doesn’t help the countless other people that are in a less fortunate situation,” the Woodbury daycare provider’s husband said. “If we get it passed, great. But that’s not going to help people across the street there. Those are all HOAs. It’s not going to help the hundreds of kids that need child care.”

Editor’s note: Ava Kian wrote this story for MinnPost.com. Kian is MinnPost’s Greater Minnesota reporter.

This article first appeared April 12 on MinnPost and is republished here under a Creative Commons license.

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.