Midwest Tops in Affordability and Life Quality

Seeking an affordable, livable place in the U.S.? Look around the Midwest

By Venessa Wong

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As the old saying goes, you get what you pay for. Unfortunately in real estate, value is a trade-off. Someone in Manhattan is willing to pay $2,200 per month to rent a studio apartment so as to be near jobs and cultural amenities, sacrificing square footage. For someone in Las Vegas, where housing is inexpensive—the city's median home value is about $115,000, according to real estate site Zillow.com—and the labor market is tough, the reverse is true. What if you could have both proximity to work and quality of life at an affordable cost?

While this may sound too good to be true, it's the status quo in some places. In an exclusive ranking for Businessweek.com, Bloomberg Rankings analyzed government-gathered data on more than 3,000 counties across the U.S. to select the best affordable place in each state. We then scored each county by state. Next we tallied the top-ranked county in each state to arrive at a national ranking. Factors that were most heavily weighted include housing cost, crime, unemployment, and educational attainment in the county, in addition to such other metrics as family income, poverty, commute time, air quality, diversity, and share of families with children. We considered only counties with median income ranging from 85 percent to 125 percent of their states' median income, with poverty rates below the state rate. State-level student-teacher ratios and state SAT scores were also considered to gauge education values within states.

"We looked for diverse populations with robust economies where people could live and work," says Jennifer Prince, rankings analyst for Bloomberg.

The Midwest made out well in the ranking. No. 1 on Bloomberg's list: North Dakota's Cass County, home to Fargo and West Fargo. Other areas with high scores include Brown County, S.D., Cleveland County, Okla. (in the West South Central region), Story County, Iowa, and Olmsted County, Minn.

Coastal states with high unemployment such as California, Florida, and Rhode Island ranked lower, as did states with a generally high cost of living, such as Hawaii.

Cass County's Low Cost of living

Cass County Administrator Bonnie Johnson says affordability and a strong economy have attracted many. North Dakota's fastest growing county, Cass's population swelled by 21.6 percent over the last decade, to 149,778 people, according to 2010 U.S. Census data. Most of the population lives in Fargo, which grew by 16.5 percent, yet Johnson says the fastest growing area is West Fargo, a smaller city that experienced a 72.9 percent increase in population since 2000.

Demand for housing has grown with the population, yet prices remain low because residential stock increased. The median list price in the county was $159,000 in April, according to Zillow.com. The median property tax paid on homes is $2,651, about 3.73 percent of median household income, according to 2005-to-2009 data from the Tax Foundation, a Washington-based think tank that promotes lower taxes. (The U.S. median is 2.81 percent of income.)

With expenditures so low, only 23.6 percent of Cass County households spent more than 30 percent of income on housing (considered by housing authorities to be the threshold for affordability)—far below the national rate of 36.7 percent revealed in U.S. Census Bureau figures.

In Brown, Cleveland, Story, and Olmsted counties, the share of households spending more than 30 percent of income on housing also ranged from 20 percent to 25 percent, data show.