Many cities and states that saw real-estate growth and speculation drive up property values in recent years are now feeling the pain of the bubble's burst.

With health costs, retiree benefits and other local government expenses increasing every year, localities are asking their agencies to get creative in finding new revenue. The Department of Parks and Recreation in Jefferson, Georgia, did just that this past August when it launched a community radio station.

Cities need to attract both the "creative class" and blue-collar manufacturing to survive in the 21st century.