By Nick Pachetti & Alan Mirabella With Reporting By Roberta Kirwan And Kathy McCleary

(MONEY Magazine) – Some places are blessed with superb geography. Some are meccas for arts and culture. Others have great schools, low crime and a thriving job market. All of those things can make a place great. Yet it also takes so much more, whether it's childhood memories, family ties or close friends. After all, great places are as much about the feelings they evoke as the amenities they offer. Which is why selecting our annual best places to live is so challenging.

Last year, MONEY editors put San Francisco and New York City on the top of the list, which created quite a stir. They're still compelling, of course, but the economic growth that put them at their peak last year has now made them even more expensive. That's why this year we focused on economically vibrant cities that are also successfully managing their growth and providing the highest quality of life around. Along with our usual emphasis on solid schools, low crime and job growth (according to U.S. Census and demographic data compiled by Fast Forward, a consulting firm), we also wanted areas that have avoided urban sprawl and overcrowding, where city fathers have put a premium on green space, culture and having an accessible city center. That is why you'll find Portland, Ore. as the No. 1 choice for 2000 and Sarasota as our best small city. We've also awarded top honors regionally to Providence (in the Northeast), Chicago (Midwest), Raleigh/Durham/Chapel Hill (South) and Salt Lake City (West). Along with our top picks, check out our other Five-Star places, on page 153. Of course, any list like this is subjective, so we encourage you to visit MONEY.COM (AOL keyword: MONEY), where you can identify and compare areas based on criteria you select.


POPULATION 1,765,400






TOP NEIGHBORHOODS Irvington, Multnomah Village, Pearl District, Sellwood

HOT SPOT Brazen Bean bar for its great happy hour and $3 martinis

FUN FACT Portland is the only U.S. city with a volcano inside the city limits.

Ask nearly anyone who lives in Portland what makes it great, and you'll be listening for a very long time. Portlanders are deeply passionate about their city--and rightly so. There's plenty to be proud of, especially the city's successful transformation from old timber town to high-tech hub. Portland is home to more than 1,200 technology companies, from Intel--the largest private sector employer with 11,000 workers--to Hewlett-Packard, Epson, NEC and scores of small software firms. That's made it one of the best job markets in the country. The region ranks in the top 20% of all metro areas in recent job growth and is expected to see a 26% increase in jobs in the next 10 years.

If all this tech talk makes it sound a bit like San Francisco, well, it is, but without the hassles and expense. That put Portland high on our list, yet there's so much more that makes it this year's best place to live. Let's start with the great character of the city itself. Three decades of keen planning have reined in urban sprawl and given rise to a mini-metropolis with short, easy-to-stroll blocks renowned for java joints, brewpubs and bookstores. A superb light rail network and a new streetcar system are helping to make it a cinch to get around. There's loads of culture, from the Portland Art Museum to local rock clubs.

Planners are working on redeveloping the barren riverfront area and on building a new extension of the light rail line that runs to the airport. They have successfully turned the once industrial Pearl District into a vibrant place to live and work--a Pacific Rim version of New York City's trendy Soho. More people than ever before want to live downtown, and so many companies are clamoring for space there that the vacancy rate is a slim 3%.

"We're growing gracefully," says Mayor Vera Katz. "And that's because we made decisions early on about our urban-growth boundary, to honor the pedestrian over the automobile and to plan out growth and transportation as a region." Adds city bureau of planning director Gil Kelley: "We're reinventing ourselves as a very urban place by incorporating the natural environment, transportation, parks and neighborhoods."

Those qualities--and a high-tech job--lured Yeng Chen, 31, and his wife Lisa from New York City two years ago. "It's a great community," says Chen, the vice president of product development for Performance Logic, a software company. "It's urban but not hectic. You can walk to restaurants, and it's affordable." The Chens rent a two-bedroom, 1,100-square-foot apartment downtown for $1,000 a month and have signed a deal to buy a 3,000-square-foot home in Irvington in northeast Portland.

Margaret Tuchman and her husband Tom, who moved to Portland from Alexandria, Va. seven years ago, are also unabashed fans of the city. "We've really liked it from the get-go," says Margaret, 41, a vice president and financial adviser with Morgan Stanley Dean Witter; Tom, 40, runs a natural-resources consulting firm. "It's an easy, manageable place to live, and once we had kids, Portland became even more appealing." The Tuchmans have settled with six-year-old Helen and Emmy, 5, in a four-bedroom turn-of-the-century home in Portland Heights, a family-friendly neighborhood where parents gather on the street to chitchat in the evenings while their children play tag and jump rope.

Then there is the other major reason to recommend Portland: its stellar location in the heart of the beautiful Pacific Northwest. It's an area of unparalleled natural beauty, abundant with recreational opportunities, from skiing at majestic Mount Hood to windsurfing at the Columbia River Gorge and white-water rafting on the Clackamas River. Overall, there are 9,500 acres of parkland in the region, twice as many as in Denver. Not enough fun for you? Oregon's wine country is a hop away, as are rugged Pacific Ocean beaches. "Within an hour of the city you can be on a mountain, at the beach, in the desert or in the middle of a forest," says Portland native Matthew Subotnick, 28, creative services director for KXL radio. "You can't beat it."

To be sure, Portland faces plenty of pressures. The median price of a single-family home is $165,700, ranking it in the top 100 most expensive areas in the U.S. The building boom downtown has pushed some condominiums to the half-million-dollar mark and beyond. "I can't afford to live there," says Mayor Katz. The city's low vacancy rate, while great for landlords, can be tough on companies looking for space. Oregon's 9% personal income tax leads some businesses and workers to seek out opportunities across the river in Washington, which has no such tax. And there are 152 days a year with some precipitation.

Still, Portland residents, like high-tech entrepreneur Wyatt Starnes, love their city. Three years ago, Starnes founded Tripwire, a software security firm, in the heart of downtown. Today the company has 125 employees. "Portland has a wonderful urban feel, lots of restaurants, music, culture," he says. Just as important, he says, is that "people here just aren't in it only for the money. The workers really want to contribute something of value. They want to build careers and live here and are looking to the longer term." But for him Portland's lure is deeper. "There's a feeling that there's room to breathe here."


POPULATION 1,128,100






TOP NEIGHBORHOODS Armory, East Side, Downtown, Elmwood

HOT SPOT Providence Oyster Bar, seafood spot in the popular Federal Hill district

FUN FACT Built in 1828, Providence's Arcade is the nation's oldest indoor shopping mall.

On NBC's hit drama Providence, the Rhode Island capital is cast as an idyllic town with a clean, sparkling river, colonial-style homes and well-groomed lawns. That's not very far from the truth these days.

In the past several years Providence has experienced a remarkable rebirth, making it one of the country's best places to live for young urban professionals. Over $740 million was spent to replace empty, dust-covered lots and run-down, dilapidated buildings with new parks, plazas and roads. Providence has restored riverbanks, moved railroad tracks underground, and rerouted rivers to better connect downtown, or "downcity," with the younger East Side neighborhood. Last year saw the opening of the 150-store Providence Place Mall, built in Federal style to blend with downtown's historic buildings. And like nearby Boston, the city has become a magnet for scores of software and Internet-design companies as well as financial service giants like Fidelity, which has 3,000 jobs in the city.

But what gives Providence a considerable edge over its northern neighbor is the quality of life. Home prices are much cheaper and it's a lot easier to get around, especially with Boston tangled in the "big dig" highway project downtown. And Providence is among the 100 safest cities in the U.S., having posted just 312 violent crimes per 100,000 persons last year, half the national average.

All of that only adds to the great things the city already had to offer. Ivy Leaguer Brown University, renowned culinary school Johnson & Wales University and artists' mecca Rhode Island School of Design are in town and offer plenty of exciting culture and youthful energy. Providence is also home to two of the country's finest theaters, the Trinity Repertory Company, and the Providence Performing Arts Center, which presents an impressive array of Broadway shows and top-name performers. Foxboro Stadium, where the New England Patriots play, is just 20 minutes away. Should Boston beckon, it's just 45 minutes by train, and the Newport beaches and the Cape aren't far off either.

By the time Providence made its debut in January 1999, those kinds of amenities were already attracting young talent to the city. Jeff Stibel, 27, moved to Providence four years ago to get his Ph.D. at Brown. Two years ago, Stibel, who's from Westport, Conn., put school on hold to start, an Internet company that offers a unique search engine. The state and local tax incentives aimed at technology companies were enough to persuade him to stay local.

Stibel also wanted some of what Silicon Valley has to offer--ample restaurants, entertainment and a highly educated job pool--without exorbitant real estate prices. "Home prices are obscenely less expensive in Providence than other cities, and the cost of living is half what it is in California," says Stibel, who bought a two-bedroom, 1,800-square-foot townhouse on the water three years ago for just over $100,000.

The real estate market is good: The median price for a single family home is $128,900, just below the national median of $134,000 and 50% cheaper than in Boston. Real estate's been a solid investment here too: Homes have appreciated 8.1% in the past year. Stibel thinks the city's such a good investment that he insisted remain based in Providence before agreeing to merge his company with free Internet access provider NetZero.

There are other positive signs for the city. In 1997, an arts and entertainment empowerment zone was created downtown, offering sales and income tax breaks to arts professionals and tax incentives to property owners who convert dilapidated district buildings into residential space. Since then, artists have flocked to the city. "We're the only city in the United States where artists can live and pay no income taxes," says Mayor Vincent "Buddy" Cianci, who was first elected to office in 1975, forced to resign after being convicted of assault in 1984 and re-elected in 1990.

There's still room for improvement in Providence. It's expected to see a 5.7% increase in job growth in the next decade, good but not great. And residents are finding their town a bit more congested now that it's become such a popular corporate center.

Yet the renaissance continues. Two new museums and an independent Sundance movie theater are in the works. And by 2007, Cianci plans to remove the oil and gas tanks that clutter the waterfront and move eyesore I-95 underground, creating parks and residential housing. Soon there won't be any reason to go to Boston at all.


POPULATION 7,743,400






TOP NEIGHBORHOODS Andersonville, Hyde Park, Lakeview, Wicker Park

HOT SPOT The Goodman Theatre, with its new $65 million state-of-the-art theater complex in the North Loop area

Like New York City or Los Angeles, Chicago has all the right urban things: pulsating night life, vibrant culture, and shopping and restaurants galore. But think of all the things it doesn't share with those places: the crushing density, the sky-high prices, the gridlock at 5 p.m.

What makes Chicago so great is that it looks and acts like a big city, but it doesn't feel like one. Unlike so many cities its size, its cultural and recreational charms come with some big benefits. You won't break the bank to live there; rents and home prices remain relatively reasonable. It's accessible by public transportation and car. And it's looking spiffier than ever thanks to major beautification and redevelopment efforts.

Yes, BusinessWeek magazine recently lambasted the city, saying it's losing its edge as a financial capital and lagging in the race for tech jobs. We respectfully disagree. We think Chicago is doing pretty nicely and is the best place to live in the Midwest--and more. With a population of nearly 8 million, Chicago is the most livable major city there is, major being places that are home to several million people or more.

Bill Underwood and his wife Christine certainly feel passionate about the city, especially when they want to go out on the weekend. The legendary Green Mill jazz club is a few minutes from their apartment. There's gleaming Lake Michigan and the Navy Pier. And there's often a great storefront theater production to take in. "This town has a wonderful range of just about everything," says Underwood, a 31-year-old aspiring actor. "It's never let me down."

Indeed, Chicago's on the upswing. Mayor Richard M. Daley has planted hundred of trees, cleaned up the grime and created a "museum campus" to link the Adler planetarium, the Field Museum and the Shedd aquarium. Along with that, several major cultural institutions have been expanded or renovated, such as the world-class Goodman Theatre, which just completed a $65 million project that includes two new theaters downtown. "It's an amazingly rich, dynamic and vital center for the arts," boasts Robert Falls, Goodman's artistic director.

Chicago natives like the Underwoods wouldn't think of living anywhere else. But the appeal goes beyond the fun stuff. Their two-bedroom, 1,600-square-foot apartment in the Ravenswood section costs just $825 a month, a fraction of what they would pay in New York City or L.A. They're not worried about setting down roots for the long term, because home prices are reasonable and the public schools are improving. The median price of a single-family home is $170,200, which is 50% less than in San Francisco and 20% less than in New York and Los Angeles. On the education front, schools CEO Paul Vallas has shaken up the once notorious system, adding magnet schools, more than 1,000 new classrooms and 69 new or rehabilitated school buildings. "People feel better about the schools, which makes them feel better about Chicago," says Vallas.

Chicago has taken its share of hits in the past several years. Corporate consolidation has hurt the city's image as a headquarters town and cost it jobs. In the past year, Chicago posted job growth of just 0.5%, ranking it in the bottom half of all metro areas. Yet the spirit in Chicago is upbeat. Last year, more than 30 million people visited the city, a new record. Guess they just wanted to join in on all the fun.


POPULATION 1,031,600






TOP NEIGHBORHOODS Downtown (Raleigh), Trinity Park, West Village (both Durham)

HOT SPOT Brightleaf 905 eatery, located in a renovated tobacco warehouse (Durham)

FUN FACT The area has more Ph.D.s per capita than any other place in the country.

The Raleigh/Durham/Chapel Hill area is a sports fan's paradise. It's home to the Tar Heels, the Blue Devils and the Wolfpack, three teams bound to entertain. But what makes the area even more flashy to us is that it's become a major center for researchers, scientists and big thinkers of all types.

So while the b-ball guys have been winning games, this central North Carolina spot has been churning out innovations like the AIDS drug AZT, as well as countless cancer drugs, vaccines and business patents. That comes thanks to the presence of several corporate giants, among them IBM and Glaxo Wellcome, which have developed research centers at the Research Triangle Park.

Today companies in the park--located in the triangle created by North Carolina State University in Raleigh, Duke University in Durham and the University of North Carolina at Chapel Hill--and the surrounding area employ thousands. IBM alone counts 15,000 people. And new arrivals from pharmaceutical to telecommunications to software companies continue to pack them in. Cisco Systems is adding 2,000 jobs in the next two years, and Lucent is building a new $25 million optical-networking research facility.

Booming doesn't begin to describe it. While Raleigh/Durham/Chapel Hill saw only about 2% job growth in the past year, the employment picture is expected to explode going forward, with 24.8% growth by 2010, placing it at No. 25 in the U.S.

Michael Tiemann is one of many professionals contributing to that number. When California-based software company Cygnus Solutions was acquired by Red Hat in January, Tiemann, 36, had no trouble embracing a move to Raleigh with his wife and one-year-old daughter to be closer to the company's headquarters. He had noticed on business trips that people there work at a frenetic, Silicon Valley-like pace but know how to unwind when they go home. Now he appreciates the southern atmosphere, whether he's shopping at a supermarket or jogging near his house, and he loves his quiet neighborhood, with homes scattered on large lots, surrounded by forest.

What's not to like? At $164,600, the median price of a single-family home is far lower than in tech centers like San Jose, Calif. (where the number is $327,800). At the same time, the local scene offers far more variety than most places. The three communities, within 20 minutes of one another, have distinct but complementary cultures. Raleigh, the largest of the three, with a population of 550,000, is the state capital and boasts the most entertainment, including ballet and opera companies, theaters and museums. Durham, once a tobacco town, is now a thriving center for medical research, thanks to Duke Hospital. And Chapel Hill, home to 44,000 residents and the Tar Heels, is a small, charming college town with a great quality of life. All three are served by an exceptional airport--Raleigh-Durham International--and are just two hours from the beach and four hours from the Appalachian Mountains.

Some residents gripe that traffic has become a nuisance, with Interstates strained by the arrival of New Economy denizens. But compared with other high-tech hot spots, this place is nirvana.


POPULATION 1,221,000






TOP NEIGHBORHOODS East Bench, Gilmour Park

HOT SPOT Brewvies movie theater and restaurant, where you can dine while watching flicks

FUN FACT More than 60% of the city's households have computers, the highest rate in the nation.

No, we did not pick Salt Lake City because it will host the 2002 Olympic Winter Games, although that's probably the best advertising a city can buy. for all the excitement and attention the Olympics will bring to this town, the games will be around for only two weeks. For Salt Lake City to make the cut, there had to be something more. And there is.

Salt Lake City is safe, clean and affordable, with magnificent access to the great outdoors. Just 20 minutes from downtown, you can enjoy the wilderness or bike the canyons. A half-hour and you're on the slopes of Alta, Deer Valley or Park City, ski resorts famous for their consistently good snow (Salt Lake City gets 58 inches of snowfall a year). Zion, Bryce Canyon and Arches national parks are roughly four hours away, as is Moab, an area that boasts some of the best hiking and mountain biking in the country. It's no wonder that residents, including newly elected mayor Rocky Anderson, like to brag. "I can leave my office and be up the canyon hiking in less than half an hour," says Anderson.

Jack and Annette Tanner, both 60, are also beaming with pride about this town settled by the Mormons and home to the Mormon church. They've lived in Salt Lake City all their lives and love the city's opera, symphony and ballet but insist the outdoor activities are the best. "We can't get enough of the outdoors," says Jack, a manager at a local health-care company who rides his bike 20 miles three to four times a week. His son competes in mountain bike races, and his daughter is a ski instructor.

Beyond the outdoors, Salt Lake City's job market is booming. In the next 10 years, employment is projected to increase by a staggering 28.5%, ranking it No. 11 in the U.S. Technology is one of the big drivers of this boom. Companies like Intel and Gateway are major employers, drawn to the area for its low labor and construction costs, as well as for the highly educated and multilingual work force.

Salt Lake City also has low housing costs--the median price of a single-family home is just $138,700--yet those numbers are trending healthily upward: Homes have appreciated 7.9% in the last year, besting the pace of places like San Jose, Calif. Another attraction: the relative safety of the city. There were only 380 violent crimes per 100,000 persons last year, nearly half the national average.

Dan Payne, 32, grew up in Salt Lake City and moved to Los Angeles to attend the University of Southern California. After graduation, he stayed on for three years working at an accounting firm. He liked Los Angeles but felt it was too expensive. So in 1993 he moved back to Salt Lake City, where he's a financial consultant for Salomon Smith Barney and spends 20 hours a week biking, kayaking, skiing or fishing. He recently bought a three-bedroom, 2,300-square-foot house for $163,000 near the University of Utah, in a neighborhood of mostly young professionals. "That same place would have cost me $400,000 in L.A.," he says.

The Olympics have placed new pressures on the city. Several major road construction projects have temporarily made it difficult to get around and lengthened the city's commute times. Still, once the games arrive--and after they go--Salt Lake City will be ready and eager for its closeup.








TOP NEIGHBORHOODS Burns Court, Lakewood Ranch

HOT SPOT Fred's restaurant, downtown

FUN FACT It was once the winter base for Ringling Bros. and Barnum & Bailey Circus.

There are 35 miles of pristine white sand beaches just minutes away from Rose and Richard Elliott's three-bedroom home in Sarasota, Fla. But you'd never know it by talking to them. "Of course, there are beaches," says Elliott, 52. "But we hardly ever go to them. There's just so much else to do down here."

Sarasota may be the ultimate beach town, with its sun-kissed location on the Gulf of Mexico, more than 200 sunny days a year and an average year-round temperature of 71[Degrees]F. Yet there are plenty of other reasons why we named it the best small city. The county--which includes Venice, Northport, Longboat and Siesta Keys--has its own symphony, ballet and opera companies. The 1,800-seat Van Wezel Performing Arts Center lures productions like the Broadway road company of Chicago. The Ringling Museum of Art--established by circus baron John Ringling, who settled in the area in the 1920s--has an extensive collection of American and European art. Like sports? Just an hour away there's the NFL Tampa Bay Buccaneers and arena football's Storm.

Sarasota also offers a triple threat: The lifestyle is very affordable. The median home price is a mere $126,000. Says Tracey Seider, an agent with Re/Max Realty: "This is the kind of place where you can get an incredible, brand-new home for $200,000." The schools are outstanding, and the job market is brisk. Sarasota County's public school students in key grades outscored 95% of their peers in the state. And perhaps most of all, the city posted job growth of 5% in the past year, ranking it among the top 25 metro areas in the country. During the next decade, it's expected to see a 30.5% increase in jobs, putting it at No. 7 in the U.S. Many of those jobs are in the retail and service sectors--Sarasota is a thriving tourist destination--but they are also in other industries.

Accounting firm Arthur Andersen established a small presence when it acquired a 20-person tax software company there in 1984. Today it has 850 employees in four divisions, including its technology solutions unit. "For people who want to work and live in a small community, it offers plenty of advantages," says James Shedivy, Andersen managing partner. "You can go home to have lunch with your kids."

It's so desirable that communications executive Nicholas Branica commutes to his job in Charlottesville, Va. rather than uproot his wife Tonie and his two daughters, Christina, 11, and Nichole, 8. Branica settled in a six-bedroom beach house in Siesta Key when he took over Sarasota-based Key Voice Technologies, a telecommunications firm. When Branica became CEO of another telecom firm, Charlottesville-based Comdial, he never thought of leaving Sarasota. "We can jump in our boat and drive around the keys to fish or watch dolphins; we can watch manatees at the beach," says Branica, 47. "You couldn't get us out of here with a nuclear explosion."


Data based on metropolitan statistical areas