Fremont, California is the happiest city in America. I grew up in Fremont, but you don’t have to take my word for it: WalletHub chose Fremont after surveying America’s 182 biggest cities for indicators including income, employment, community and environmental well-being. Fremont has the lowest divorce rate in the country, the fourth-highest sports participation rate, and dreamy California weather. In addition, Fremont’s residents and city government have taken unique steps to promote economic prosperity.

Big Business-Friendly

Fremont has capitalized on its proximity to Silicon Valley and can offer lessons to other cities. It has facilitated growth and avoided other cities’ wasteful spending. The city has not rested on its laurels or chased away its success through misguided regulations.

Supporting innovative companies would help the nation’s economy because they sell “differentiated” products nationally and globally.

Fremont over the past decade is a microcosm of economic changes in America. In 2010, the last gas-car manufacturing plant on the West Coast closed its doors. That plant, known as NUMMI, exemplified the problems of overly-powerful unions and American car companies’ inability to innovate sufficiently quickly. Tesla purchased the plant several months later with the help of tax incentives from the state capital. It soon became Fremont’s leading employer, even though much of the manufacturing is now being done by robots. 

In 2012, the city of Fremont commissioned an innovation scorecard and plan of action. The commission identified navigation of state and federal regulations as one of its greatest impediments to growth. Fremont has consistently had the highest concentration of start-ups in the country in industries such as biotech, manufacturing, and clean technology, which could benefit from deregulation. The commission also noted that supporting innovative companies would help the nation’s economy because they sell “differentiated” products nationally and globally rather than creating goods and services for the local economy.

Small Business Ally

To streamline permit and other processes, Fremont created a “Small Business Ally” in city hall. Few cities have a single point-of-contact to help untangle red tape and coordinate between duplicative or contradictory government agencies and regulations.

Fremont created a facilitator, not a gatekeeper.

Fremont’s first Small Business Ally, Jackie Hall, retired in March and the city is currently looking for her successor. During her tenure, Jackie learned from a successful project in Santa Cruz, CA, and created a handy online platform for zoning and regulatory compliance. This effort demonstrated an authentic desire to facilitate business and not create a new government bottleneck.

A single administrator can be given too much power, but the cost of paying for Fremont’s new employee was worth it. Lee Lambert, director of the Alameda County Small Business Development Center, said that the climate for small businesses noticeably improved in Fremont. Fremont created a facilitator, not a gatekeeper.

Educated and Engaged Populace

Fremont has benefited from having an educated and engaged populace. When the Oakland baseball team (the Athletics) wanted to build a new stadium in Fremont in 2006, former mayor Bob Wasserman liked the idea. It is a glitzy achievement popular with politicians. But a group of residents known as the Fremont Citizens Network led the Athletics to abandon the idea in 2009. They led protests and let the city’s politicians know that the estimates of the associated economic benefits provided by the consortium seeking the stadium were substantially overstated.

A vibrant shopping and entertainment center called “Pacific Commons” has sprouted since then in the area planned for the stadium. Cities such as Las Vegas and Atlanta did not take Fremont’s path, and now have taxpayers paying millions for new stadiums. Other cities, such as St. Louis, offer teams millions of dollars to stay.

What Others Can Learn

Fremont’s prosperity today is evident in the economic numbers. The unemployment rate is just 2.6 percent, and the median household income is $114,000. Highly-skilled immigrants continue to flow from East and Central Asia: over 45 percent of the city’s population is foreign-born. Fremont’s religious and ethnic diversity has been a bonus, and the global innovations of Silicon Valley have benefited all of America.

Observers of Fremont can learn three lessons from America’s happiest city.

Employers have an imperative to hire the best workers, no matter where they are from. Subtle tensions can be felt in Fremont, due to issues such as rising housing costs, but the city’s ability to pay for services is also increasing. The city council has thankfully avoided counterproductive rent control measures.

Observers of Fremont can learn three lessons from America’s happiest city. First, cities can do more to help businesses deal with regulations. Second, residents should be wary of costly development projects such as stadiums, or expensive promises to lure Amazon or other big companies. Finally, successful cities and states welcome new talent and ideas. Cities that emulate these factors will reap the benefits.

They’ll be happy they did.

Reprinted from Economics21.