Chattanooga moves up 26 spots in ‘best performing cities’ ranking

Staff File Photo by Robin Rudd / Chattanooga icons line up under the rising sun in this Tennessee River view from Coolidge Park. The Walnut Street Bridge, the Market Street Bridge, Lookout Mountain, and the Tennessee Aquarium are some of Chattanooga's best-known attractions.
Staff File Photo by Robin Rudd / Chattanooga icons line up under the rising sun in this Tennessee River view from Coolidge Park. The Walnut Street Bridge, the Market Street Bridge, Lookout Mountain, and the Tennessee Aquarium are some of Chattanooga's best-known attractions.

Mayor Tim Kelly is touting a new ranking of the nation's best performing large cities, which shows Chattanooga rose 26 spots — from No. 72 to 46 — out of 200 of the most populous metropolitan areas.

"I think it's evidence that the work is working," Kelly said in a phone call. "I hope we continue to move up as we continue to gain traction in all these key areas. We're encouraged."

The Milken Institute, a nonpartisan think tank, calculates the rankings based on 13 measures across three general categories — labor market performance, high-tech impact and access to economic opportunities. The measures include wage growth, job growth, income inequality and a community's ability to bounce back from economic or natural disasters.

In the ranking, Chattanooga is defined by its metropolitan statistical area, which includes Hamilton, Marion and Sequatchie counties in Tennessee and Catoosa, Dade and Walker counties in Georgia. Chattanooga ranks third highest of the six Tennessee cities that appear on the list, behind Nashville and Knoxville.

"We're trying to make Chattanooga the best city in America, and when you get feedback like this from an objective third party that indicates progress, that's gratifying," Kelly said.

The Chattanooga metropolitan area ranked No. 6 in housing affordability, which is based on the percentage of households paying less than 30% of their income on housing. Kelly gave partial credit to new regulations the city has imposed on short-term vacation rentals for that ranking, which strive to curb illegal units while restricting many new rentals to commercial areas.

"Our strategy around affordable housing is multivariate," Kelly said. "There's a lot of different angles. It appears to be working, which is gratifying."

Rankings breakdown

Chattanooga claimed No. 46 out of a field of 200 in this year's Best Performing Cities report for large cities. Here's how the Chattanooga metropolitan area ranked across the 13 measures used in the calculations:

— Housing affordability: 6.

— High-tech gross domestic product growth (2021-2022): 13.

— Short-term job growth: 31.

— Wage growth (2021-2022): 34.

— High-tech gross domestic product growth (2017-2022): 45.

— Wage growth (2017-2022): 61.

— Job growth (2017-2022): 70.

— Job growth (2021-2022): 90.

— Gini index, which measures income inequality: 97.

— Households with broadband internet subscriptions: 129.

— Ability to recover from economic or natural disasters: 153.

— High-tech industries with a GDP share above the national average: 171.

— City's GDP from high-tech sectors compared to the nation's share: 187.

Source: Milken Institute

Affordable housing was the top concern identified by respondents in a recent survey by the Hamilton County Health Department, and without additional action, Kelly has said, the city could see a shortfall of 7,000 affordable units by 2030. His administration unveiled a road maplast year that aims to close that gap.

The mayor added his administration has advocated for state legislation that would enable cities to offer developers zoning variances, like an extra floor to an apartment building, if they agree to maintain a certain number of units as affordable housing over a period of time. A bill sponsored by state Sen. Todd Gardenhire, R-Chattanooga, is working its way through the General Assembly.

"We can't do that currently," Kelly said. "We are preempted from offering that as an incentive. This would change that."

Chattanooga also ranked 129th for the percentage of households with broadband internet subscriptions. Kelly said he hasn't dived too deep into that metric, but he noted broadband coverage is different from cost, speed or availability, all of which is buoyed by the city's' electric utility, EPB.

(READ MORE: 'Fireside chat' with Chattanooga mayor touches on infrastructure, crime, homelessness)

"This definitely covers the entire metropolitan area, which would include North Georgia and parts of northern Hamilton County where they don't have EPB and frankly still struggle to even get broadband coverage," he said of the ranking. "That I think must be hurting our ratings."

Last year, WalletHub ranked Chattanooga as the second-worst run city in the United States out of 149 assessed. In his 2023 State of the City address, Kelly called the study "BS" and the methodology flawed and incorrect. The Milken Institute, by contrast, has been transparent in how it calculated the rankings, Kelly said Wednesday.

"They couldn't be more different in the sense that WalletHub is not even a journalistic institution," Kelly said. "Their methodology is not transparent, they won't share it with us, which is why we were so frustrated."

To determine the quality of services, WalletHub scored cities across six categories — financial stability, education, health, safety, the economy, and infrastructure and pollution — by relying on 36 distinct metrics.

Those datapoints included the unemployment rate, the violent crime rate, the average life expectancy, the share of sheltered homeless people, public transit, the high school graduation rate, the infant mortality rate and the perception of safety.

WalletHub divided that calculated quality score by the total government budget per capita to determine the rank of the cities assessed.

The survey defined "city" broadly, including a standardized set of public services for each locality, whether they were provided by City Hall, the county, the wastewater authority or any number of government agencies. All were assessed as services for a given city's residents, regardless of what agency provided the services.

"Chattanooga ranks 129th for motor vehicle fatalities, which could potentially be improved by allocating more of the city's budget into pedestrian safety education and prevention projects," WalletHub analyst Jill Gonzalez told the Chattanooga Times Free Press at the time.

Comparable cities

Austin, Texas, and Raleigh, North Carolina, were ranked as the top cities in this year's Best Performing Cities report for large cities. Here are some cities whose rankings were comparable to Chattanooga, which ranked No. 46:

41. Indianapolis, Indiana.

42. Grand Rapids, Michigan.

43. Daytona Beach, Florida.

44. San Jose, California.

45. College Station, Texas.

46. Chattanooga, Tennessee.

47. Boulder, Colorado.

48. McAllen, Texas.

49. Reno, Nevada.

50. Madison, Wisconsin.

Source: Milken Institute

Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249.

  photo  Staff Photo by Robin Rudd / Mayor Tim Kelly, right, answers a question from WRCB's Greg Glover. Two years into his first term, Chattanooga Mayor Tim Kelly delivered his State of the City speech Aug. 3 at the Walker Theatre. Kelly was pleased Chattanooga moved up 26 spots in the Milken Institute's rankings of the nation's best run small cities.