The House on the Cerulean Sea by T.J. Klune (2020) Tor Books

A book about how prejudice and hatemongering affect the most innocent of lives.  In a world where there are magical beings, a government branch is responsible for the orphanages where magical children are kept – ostensibly to keep them safe from the world and the world safe from them.  An inspector, who has closed some orphanages because they abused the children, is sent to the most secret of these on an island.  There, he encounters beings like he never has before.  These are considered the most dangerous of magical beings.  But they are all children and they’re just doing what children do; they dream of a better life.