(MONEY Magazine) – When Joe Kandra, 36, needs a break from work, he takes his dog Kali and heads for the woods. The fragrant eucalyptus trees of Stern Grove Park, Calif. are more than an hour's drive from Cisco Systems in San Jose, a computer networking company where Joe works as a digital media specialist. But they're only a short walk from his home office, just off his kitchen in the Parkside section of San Francisco. "I love that 10-foot commute from the bedroom," he says with a laugh. Like thousands of San Franciscans such as Janna Tess (at right), Joe works from home a few days each week. And why not? He lives in the No. 1 city in America for telecommuting.

That's what MONEY and PC World magazines have determined in a collaboration producing our first ranking and joint publication of "The Best Places to Work from Home." To come up with our winners, we combined MONEY's latest economic and quality of life data on the 300 biggest U.S. metropolitan areas with research from PC World on the kinds of factors that make life easier and more lucrative for the nation's 7.9 million telecommuters.

Working at home is a great way to spend more time with your family, avoid an ugly commute or simply get more work done in less time. But if you're not wild about telecommuting from a big city like San Francisco (population 1.6 million), then consider Raleigh/Durham/Chapel Hill, N.C., our top mid-size place to work from home (pop. 965,100) and MONEY's best place to live in America in 1994. It currently enjoys a low 2% unemployment rate, overnight delivery is easily accessible and the concentration of Internet access numbers is high, thanks in part to the area's rich university system (Duke University, North Carolina State and University of North Carolina).

If you'd prefer an even smaller locale, look east toward Manchester, N.H. (pop. 177,500), our best small place to work from home. Just 58 miles north of Boston, one of Manchester's biggest lures is the state's lack of sales and income taxes. Housing costs in New Hampshire's largest city are below average (typical three-bedroom: about $91,700), and working at home is also enhanced by the metro area's 92 computer supply stores and 43 copy centers. (For lists of our winning places, see the boxes throughout this article.)

Some cities offer clear advantages for telecommuters--from the quality of their communications services to the availability of delivery services. But when we totaled up all the numbers, San Francisco easily landed at the top; it offers the ideal combination of business resources, technological know-how and quality living. It pulses with the energy of young media companies; it courses with cash from financial institutions like Bank of America, Charles Schwab and the Pacific Stock Exchange; it sings with the sounds of cable cars, foghorns and bustling Chinese markets. And that clicking noise? That's the steady cadence of San Francisco's telecommuters checking their e-mail.

THE REST OF THE BEST

As a whole, the Golden State turns out to be golden for telecommuters. After San Francisco, five more California metro areas grace our top 10: San Jose (No. 2), Los Angeles (No. 3), San Diego (No. 4), Oakland (No. 6) and Orange County (No. 8). The chief reasons are simple: spectacular weather and a rebounding economy. In addition, in San Francisco and much of California, Pacific Bell has taken strides to make high-speed ISDN phone lines widely available and easy to use.

Like our California cities, No. 5 Seattle and No. 9 Boston are filled with tech companies. Our two top southern areas--Tampa/St. Petersburg (No. 7) and Atlanta (No. 10)--are just beginning to embrace telecommuting but already have what it takes to make the top 10.

Big cities dominate our list for good reason. They typically offer the type of Internet access and high-speed communications you need to effectively run an office away from the office today. If you have to move files, use the corporate computer network or do research on the Web, you'll want a fast, digital phone line. For most people, that means ISDN service, which is often most widely available in large metro areas. You'll also probably find it helpful to have a couple of telephone lines as well as extra phone services like call forwarding, voice mail and caller ID. What if you run out of printer paper the day an important proposal is due? It's easy to find an office-supply shop close to home in Tampa/St. Petersburg, with 417 of them in the metro area. Do you absolutely, positively have to send out that proposal by 7 p.m.? Los Angeles and Atlanta lead our top 10 with centrally located Federal Express and UPS offices. Of course, you'll also need to get the thing copied, collated and bound. For that last-minute trip to Kinko's, San Francisco is king; it's got more copy centers per capita than any other area of the country (441 in total).

In general, small cities didn't fare well in our telecommuting ranking. That's largely because these places often lack the technological marvels and home-office service centers found in the biggest metropolitan areas. Take our No. 300 city, Lima, Ohio (pop. 155,900). Planted in the state's rural northwestern section, this small metro area has few Internet access numbers and no ISDN service. Lima also suffers from a high violent-crime rate. FBI statistics put Lima's violent-crime rate at almost twice the U.S. average.

To arrive at our ranking, PC World researchers collected data about the quality-of-work conditions in the 300 biggest metro areas from local phone companies, Internet service providers, courier services, various databases and other sources. Meantime, MONEY was gathering the latest data normally used in our annual Best Places to Live in America article. Working with Fast Forward, the Portland, Ore. demographic consulting firm, we got information for nine broad categories: economy, health, crime, housing, education, weather, transit, leisure and the arts. These data come from government and private sources such as the FBI, Century 21, the American Chamber of Commerce Researchers Association and the Environmental Protection Agency. Next, Fast Forward married the MONEY and PC World data and distributed points to metro areas in all the individual categories. Finally, we weighted each metro area's scores and came up with the ranking. The MONEY categories were weighted based on the most recent survey of our readers, and the quality-of-work factors were weighted based on the advice of the nation's two leading experts on telecommuting: Jack Nilles, author of Making Telecommuting Happen (Van Nostrand Reinhold, $24.95), and Gil Gordon, publisher of the monthly newsletter Telecommuting Review.

You can find the full ranking of all 300 metro areas at the MONEY Website (http://money.com) and at the PC World Website (www.pcworld.com/apr97/telecommute). In addition, at these Websites you can create your own list of the top places to work at home based on your own preferences. Here's a brief look at our top-10 havens for telecommuters:

1. SAN FRANCISCO Three-bedroom house: $356,400; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. In a city where every new company seems to be an Internet start-up, it pays to be wired. And San Francisco offers quick ISDN connections. Says Joe Kandra of Cisco Systems: "Sometimes my home ISDN connection is almost as fast as [the one] in my cubicle at the office." Still, it takes more than fast phone lines to make a place good for working at home. San Francisco also offers a high concentration of copy centers and computer supply stores. More important, San Francisco is a superb place to live. Its world-class arts scene includes such renowned performing groups as the San Francisco Opera, and Golden Gate Park is a perfect setting in which to enjoy the city's cool, foggy summers and warm winters. For those who prefer to avoid city life, the metro area includes picturesque Marin County. Hop a ferry, and you're in the city in 20 minutes.

2. SAN JOSE Three-bedroom house: $225,000; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. Sure, San Jose and the Silicon Valley that surrounds it lie at the heart of the computer industry. But if you're expecting the city to be one big industrial park, you're in for a surprise. Burgeoning San Jose is one of the most vibrant, livable urban centers in the country. It boasts a diverse population, a start-up-happy business climate and enough warm, sunny days to make you forget what snow is. When San Jose workers turn off their PCs, there are plenty of ways to take their minds off work. For the right side of the brain, the city's symphony and repertory theater are wonderful diversions. And despite San Jose's nerdy legacy, residents have enthusiastically taken to pro sports. The Clash, San Jose's new pro soccer team, became a hit in only its first season. And there's nothing quite like a hockey arena full of techno-types cheering the Sharks to the theme music from Jaws.

3. LOS ANGELES (includes Long Beach) Three-bedroom house: $193,600; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. With Los Angeles' frenzied freeway system, you can easily see why the City of Angels is a hotbed for telecommuting. L.A. also offers telecommuters great weather, reasonable phone rates and a slew of Internet access numbers--plus, of course, more entertainment than you can shake a swizzle stick at. Robbie Rowe, 41, executive producer for the Nickelodeon kids' cable-TV network, finds that telecommuting helps her get more work done and spend time with her four-year-old daughter, Georgia. In fact, her 7 a.m. conference calls to New York are often conducted with Georgia in her lap. "The East Coast people all go home by four o'clock my time," Rowe laughs, "so nobody cares where I am."

4. SAN DIEGO Three-bedroom house: $173,000; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. Take the best weather in America. Add a laid-back lifestyle, and finish the rosy picture with an efficient transportation system that lands you anywhere in town in no time. It's easy to see why investment manager Bill Carter, 49, loves telecommuting here. Even though his office is only 10 miles from his bedroom, Carter spends about 80% of his workweek at home or visiting clients. "I don't even need a car to get to the office," he says. "I can get around on the trolley."

5. SEATTLE Three-bedroom house: $173,300; typical ISDN installation fee: $85; monthly fee for two phone lines: $21. In a city where Microsoft has made 18-hour workdays common, telecommuting plays an enormous role. Seattle is a technology mecca, with affordable telecommunications at nearly everyone's fingertips. Phone service is cheap, ISDN installation costs are about half the average of all 300 metro areas we surveyed, and you can pay low $63 flat fees for that monthly ISDN service. What's more, the overall cost of living in Seattle is 39% lower than its high-tech neighbors to the south. Did we mention that Washington has no state income tax? If you don't mind the long months of gray skies, you will enjoy hiking in the nearby Cascade and Olympic mountains or boating on Puget Sound.

6. OAKLAND (includes Berkeley and other East Bay suburbs) Three-bedroom house: $228,500; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. Oakland enjoys the same telecommuting advantages as other high-tech Bay Area cities like San Francisco and San Jose but without the hustle and bustle. Its widespread Internet access means less time in traffic. And that means more time to enjoy the gold mine of entertainment such as jazz clubs, Trinidadian restaurants and specialty record stores.

7. TAMPA/ST. PETERSBURG Three-bedroom house: $95,000; typical ISDN installation fee: $200; monthly fee for two phone lines: $23.62. Telecommuting is catching on here. One perk: The area has a high concentration of office-supply stores. Home values are appreciating at a double-digit rate, yet the average price of a three-bedroom home is still below $100,000. In fact, the cost of living is the lowest of any in our top 10. And there's plenty to do and see, from some of the most beautiful seashores in the nation to the world-famous Salvador Dali Museum.

8. ORANGE COUNTY, CALIF. (includes Anaheim, Irvine and Santa Ana) Three-bedroom house: $187,000; typical ISDN installation fee: $125; monthly fee for two phone lines: $22.50. If Norman Rockwell were still alive, the folks in Orange County would probably want to commission a series of canvases. At the center of each would be a computer and a telecommuter. Says John Grefe, president of Orange County's Telecommuting Advisory Council: "We like our families, so we're bringing work to the worker and making family life easier." Located on the southeast border of L.A.'s urban sprawl, Orange County is filled with companies discovering that telecommuting offers great savings and advantages. With only 3.1% unemployment, Orange County is also expected to experience the biggest job boom of any of our top 10 places--a 10.7% increase to 1999.

9. BOSTON Three-bedroom house: $168,500; typical ISDN installation fee: $67; monthly fee for two phone lines: $26.83. For home workers, Boston has become one of the nation's major on-ramps to the Internet. The metro area has one of the highest concentrations of local Internet access numbers of any city in the U.S. Moreover, Nynex charges a pittance ($67) to install ISDN lines in most locations. And don't worry about getting the flu during an icy New England winter--Boston has 389 doctors per 100,000 people, almost twice the U.S. average.

10. ATLANTA Three-bedroom house: $158,000; typical ISDN installation fee: $196.50; monthly fee for two phone lines: $34.90. Oddly enough, the '96 Summer Olympics sparked Atlanta's newfound enthusiasm for telecommuting. Many residents chose to work at home during the Centennial Games rather than fight the increased traffic. As a result, a number of local employers and employees who tried this work option have decided to keep it up. Fortunately, thanks to BellSouth's encouragement of telecommuting, most specialized phone services like call waiting and call forwarding are free of start-up fees in this multicultural city. All in all, when it comes to telecommuting, Atlanta is one city that proudly carries the torch.