No. 4 Charlottesville, Virginia

Population: 190,560

Income Growth:4.8%

Cost of Living Index: 106

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Median Household Income: $53,076

Percentage of Workforce in Creative Class: 38%

Thomas Jefferson would be proud of how his hometown has grown up. The Renaissance man laid the foundation for what has become a well-rounded city. From his University of Virginia's hollering Hoos to the artists on the downtown promenade, the Charlottesville community is an unexpected blend of Southern charm and liberal edge, with a strong business base.

At the heart of it all is Jefferson's university, and its concept of an "academical village." The village is built around an architecture meant to foster lifelong learning and ensure interaction between students and faculty. Today the university spreads that intellectual spirit to its surrounding city, and the school employs 18,000 people -- one-fourth of the local workforce.

But UVA provides Charlottesville with more than employment. The faculty's research, especially in biotechnology, often results in private spinoff companies, such as former professor Martin Chapman's Indoor Biotechnologies, which develops allergen-detecting products. And UVA produces fine employees, too. Graduates "provide good intellectual talent," says Michael Latsko, chief talent officer for SNL Financial, a global financial-research firm headquartered in Charlottesville.

The city is a two-hour drive from Washington, D.C., and three hours from the Norfolk naval base. This proximity helped it draw in the U.S. Army National Ground Intelligence Center, which employs 750 people in a variety of fields, including engineering and foreign affairs. Next year the center will add 800 to 1,600 jobs.

Big, stable employers plus the UVA student body add up to paying customers for the small businesses that give Charlottesville its spunk. An eclectic mix of more than 150 shops, galleries and restaurants line the historic downtown pedestrian mall.For example, one-year-old Siips Wine and Champagne Bar has already become a hot spot with its ballroom-dancing and tango nights. Just a block away, Sharon Nichols opened her Dog and Horse Lovers Boutique a year earlier. She chose Charlottesville for her dream store because it's a "vibrant city surrounded by horse country."

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