Much of the U.S. media tends to see smaller cities as backwaters, inevitably left behind as the “best and brightest” head to the country’s mega-regions. The new economy, insists the Washington Post, favors large cities for start-ups and new businesses. Richard Florida has posited the emergence of a “winner take all urbanism” that tends to favor the richest cities, such as New York and San Francisco.
However this paradigm may reflect cosmopolitan attitudes and rivalries between large cities more than reality, with its complications and nuances. Smaller cities have long been disadvantaged in their ability to attract the most elite companies and Americans on the move, but that may well be changing. Following a post-financial crisis period in which many domestic migrants headed to the big cities, the latest Census data suggests that the flow is now going the other way, with the native born moving to smaller places with between 500,000 and a million people. The new trend in migration, notes the Atlantic’s Derek Thompson, a confirmed big city booster, has been a “great hollowing out,” with Americans leaving places like New York, Los Angeles and San Francisco for the suburbs and less costly, usually smaller cities. (Note that at least in New York’s case, foreign immigrants have been taking their places.)
To be sure, many smaller towns are suffering, and the bottom of our annual survey of employment trends in America's 421 metro areas is dominated by them, starting with last place Beckley, W.V.; followed by Johnstown, Pa.; Charleston, W.V.; Weirton-Steubenville, Ohio; and Peoria, Illinois. Yet at the same time small city America — which we define as metro areas with less than 150,000 jobs — accounted for seven of the 10 cities where job growth has been the strongest.
2017 Best Cities Rankings Lists
Methodology
Our rankings are based on short-, medium- and long-term job creation, going back to 2005, and factor in momentum — whether growth is slowing or accelerating. We have compiled separate rankings for America’s 70 largest metropolitan statistical areas (those with nonfarm employment over 450,000), as well as medium-size metro areas (between 150,000 and 450,000 nonfarm jobs) and small ones (less than 150,000 nonfarm jobs), the latter two of which are our focus this week, in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here).
The Utah Model
What makes for successful smaller cities? There’s no simple formula, but several characteristics loom prominently. One is the extent and quality of its amenities: Many of our top cities are in attractive locations near mountains or the ocean, and tend to be home to colleges and universities. And, almost without exception, they are located in less costly, lower-tax states. Finally, it doesn’t hurt to be relatively close to a bigger urban area and a large airport.
All these characteristics apply to the best metro area for jobs in 2017 -- Provo-Orem, Utah. Located an hour south of Salt Lake City and its big airport, the Provo-Orem area has a population of 603,000 and sits alongside the scenic Wasatch Mountains. It's home to the well-regarded Brigham Young University. Last year the metro area’s job count expanded an impressive 4.4%, and employment is up 29.2% since 2011. As one might suspect in a college-oriented area, the biggest growth has been in fields that tend to hire educated people, such as business and professional services, in which employment grew 5.8% last year, financial services (up 6.7%) and the information sector (plus 5.8%).
But Provo is not alone in outstanding job growth in the Beehive State. In addition to its largest metro area, Salt Lake City, which ranks 13th, the small city of Saint George ranks third. Also benefiting from a scenic location in the state’s rugged southwestern corner, it’s less of a college town than a retirement and tourism magnet, which explains much of its 5.7% job growth last year. This was driven in large part by big expansions in health and education, with employment in those sectors up 4.6% last year and some 31.8% since 2011.
Another Utah superstar is 18th-ranked Ogden-Clearfield. Its 2.9% job growth last year was driven in large part by financial services, with employment up 5.7%, and education and health, up 5.9%.
So what accounts for one relatively small state that's home to only 3.1% of the U.S. population placing four cities in the top 20? Among the factors: the nation’s fastest population growth, a highly favorable business climate (Gov. Gary Herbert has made cutting red tape a priority of his administration), a burgeoning tech sector and a Mormon-influenced social culture that seems to encourage citizen engagement in local affairs.
Other Hot Spots
The other smaller boom towns are a varied lot, although all share locations in low tax, light regulation states. Some bigger cities -- San Francisco, Seattle, San Jose -- seem to have found a way to keep growing in higher cost environments, but this does not seem to be the case for smaller cities. Virtually all the small communities in our top 20 -- with the exception of No. 8 Fort Collins, Colo., -- come from such reddish states as the Carolinas, Texas, Idaho and, of course, Utah.
Most of the fastest-growing metro areas tend to be in what some have called “amenity regions.” This is certainly the case for Ft. Collins, No. 9 Gainesville, Ga., No. 10 The Villages, Fla., and No. 17 Boise, Idaho. Many of these places, notably the Villages, are attractive to retirees and downshifting boomers while others may also lure young families.
Yet there are some wide differences among our top small cities. Smaller cities often have very distinctive economies dominated by one or two industries. Sixth-ranked Fayetteville-Springdale-Rogers, a metropolitan area that sprawls between Missouri and Arkansas, is dominated by two forces, Bentonville-based Walmart, and a burgeoning retirement/tourism sector tied to its location in the scenic Ozarks. The area which enjoyed 3.3% job growth last year, and 20.4% since 2011, was paced by an expanding professional and business services sector, up a sizzling 8.0% last year; other dynamic sectors include financial services, up 4.5% last year, as well as the education and health, which grew 4.0%.
Charleston-North Charleston, which ranked 4th on our list with a 3.2% job growth rate last year and 17.6% since 2011, epitomizes the new dynamic small cities. Not only does the area boast a charming ante-bellum urban core, and some of the country’s best food, it has also become attractive to companies seeking to lower costs. The city is home to Boeing’s 787 Dreamliner assembly plant and to Mercedes-Benz’s $500 million Charleston plant, which will add 1,300 jobs over the next few years. It is also about to house Volvo’s first North American manufacturing plant – a $500 million investment that could add up to 4,000 jobs home. Charleston has also emerged as something of a millennial draw as well, with the largest percentage of residents aged 25 to 34 of any midsized city.
2017 Best Cities Rankings Lists
The Future of Smaller Cities
In contrast to the conventional wisdom, smaller cities may have a brighter future than many expect. Of course, it’s hard to see a rapid turnaround in some deindustrialized cities, particularly in the Midwest. Many energy-dependent cities are down sharply in our ranking from a year ago, including Baton Rouge, La., which dropped 97 places to 191st, and Bismarck, N.D., which plummeted 119 places to 221st. The Trump administration certainly has made noise about helping the energy industry, but the cold reality of the current global oversupply of oil suggests these places won’t be rebounding much in the near term.
Right now, prospects seem best for amenity rich areas, in part because they appeal to both aging boomer and younger families. The scenic Pacific Northwest is home to many gainers this year, including Olympia-Tumwater, Wash., which gained as impressive 64 places from last year to 21st, Wenatchee, which rose seven spots to 22nd, and Bellingham, which jumped 100 places to 63rd.
In the South, the attractive coastal city Wilmington, N.C., rose 76 places to 54th, and the Florida beach towns Northport-Sarasota-Bradenton, climbed 28 spots to 35th while Punta Gorda gained 26 places to 39th.
The future of smaller American cities, in some senses, parallels that of their larger counterparts. Some areas seem positioned for further growth, while many others are stagnating or even dropping. The small city is far from obsolete, with a good number of them poised to expand strongly in the years ahead.
This piece originally appeared on Forbes.
Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.
Dr. Michael Shires primary areas of teaching and research include state, regional and local policy; technology and democracy; higher education policy; strategic, political and organizational issues in public policy; and quantitative analysis. He often serves as a consultant to local and state government on issues related to finance, education policy and governance. Dr. Shires has been quoted as an expert in various publications including USA Today, Newsweek, The Economist, The Sacramento Bee, San Francisco Chronicle, and LA Times. He has also appeared as a guest commentator on CNN, KTLA and KCAL to name a few.
Photo by City of St. George (City of St. George) [CC0], via Wikimedia Commons
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