Real Estate December 14, 2010, 8:45PM EST

America's Best, Affordable Places to Raise Kids

Welcome to Businessweek.com's fifth annual survey of the best towns, villages, and small cities to raise your children. Is your community among them?

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Chicago resident Joe Walsh got married in 2001. Later that year he and his wife packed their belongings and moved 15 miles to the suburb of Niles, Ill., to start a family. The village, noted for having an old water tower that now stands as a half-size replica of the Leaning Tower of Pisa, has nice parks. "But the biggest thing was that we could afford a house," says Walsh, now the father of children aged six and two.

In the years since Walsh bought his Niles home, lifestyle expectations have changed in the U.S. Data from every state show that fewer young adults have married in comparison to a decade ago, according to the Population Reference Bureau. Fewer families are buying property. Despite these changes, which are driven partly by such problems as unemployment, the link between raising children and owning a home remains strong for most Americans. In a survey conducted by Fannie Mae in August and September, three-fourths of respondents cited children as a prime reason to buy a home. Owning, they said, provides lifestyle advantages.

Even in such difficult times as these, owning a home remains a long-term aspiration for many families. The question has always been: Where?

In Businessweek.com's fifth annual ranking of the best places in America to raise kids, such towns as Niles—with a low cost of living, good schools, and a low crime rate—scored high. Unlike our previous reports which included some large urban areas, the 2011 ranking focuses on small cities, towns, and villages with populations larger than the median for the state but no greater than 50,000.

Target: Middle-Income Communities

In keeping with the survey's focus on middle-income communities, we've considered only places where the median family income was within 20 percent of the state median, culling affluent and low-income locales. In the U.S., median family income in 2009 was $61,082, according to the U.S. Census Bureau.

Using 2010 data from Onboard Informatics, a New York-based real estate data company that specializes in residential demographic and lifestyle information, Bloomberg and Businessweek.com evaluated 5,418 places in the U.S. We emphasized a community's number of schools, school performance, cost of living, and crime statistics. We also accounted for factors such as job growth, air quality, ethnic diversity, and access to the surrounding county's parks, zoos, theaters, and other recreational facilities.

In addition to Niles, other high-scorers in our results include Rowland Heights, Calif., 25 miles from downtown Los Angeles, and North College Hill, Ohio, 10 miles from downtown Cincinnati. Both offer housing affordable to middle-income families, proximity to employment hubs, good public schools, and low crime rates.

In addition to jobs in nearby cities, some of the communities selected also offer local employment opportunities. While many Niles residents commute to Chicago for work, the village of 29,207 has a strong commercial and industrial base, says Katie Schneider, executive director of the Niles Chamber of Commerce and Industry. Area industrial facilities include a Coca-Cola (KO) bottling plant. At 7.8 percent, the unemployment rate in Niles was down in October from 9.6 percent a year earlier, according to the Illinois Department of Employment Security.

Relatively Low Property Taxes

Nile hosts several shopping centers such as the Golf Mill Shopping Center, as well as a number of Korean food markets and stores that cater to the village's growing Korean population, says Walsh. Significant revenue from sales taxes helps keep property taxes in Niles low, says George R. Van Geem, village manager since 2005. In his district, the property tax rate is $5.80 for every $100 of assessed value, he says. A district in nearby Mount Prospect carries a rate of $6.596, according to a release from the Cook County Clerk's office.