Salem or Ashland Oregon
Hmmm, I went to college in Ashland and I truly adore it, it's such a funky hippie town, but in terms of raising children, I personally would choose Salem. There's more of a variety in educational opportunities, entertainment, and extra curricular activities. But that's just me personally, I grew up in Portland (50 miles north of Salem) so I'm used to a bigger city and Ashland just felt a bit too small town-ish for me.
However if you're okay with that you'd probably enjoy Ashland. The actually city is very expensive to own a home in, although there are surrounding areas that are much less expensive (Pheonix and Talent specifically). But Ashland also has a decent proportion of college students so rent is quite reasonable (if you are going to rent I would do it in Ashland, it's small enough that you can actually walk most places you need to get to. They don't have a ton of big chain stores in the area (the ones I missed most were Whole Foods and Trader Joes), but they do have a wonderful health food store, a great co-op, and a farmer's market. There's also a Safeway, Bi-Mart, and Albertson's in town. And Medford is about 12 miles away and a little bigger and they have Target and Walmart and stores like that. In terms of entertainment there's the Shakespeare festival which is lots of fun (though expensive), the Science Works Museum (which most kids I knew there loved), lots of lakes in the area, there's a ski resort about 15 minutes outside the city, lots of hiking. Basically it's a great place if you love the outdoors. Also, I believe Ashland has a 50% vaccine exemption rate, which depending on your views may be a good or bad thing. Anyway, I know that's a bit disjointed, but I hope some of that info helped a little. If you have any questions I could take a shot at answering them. My main problem is that when I lived in Ashland I was a student and didn't have children so I wasn't looking at it the way I would now as a parent.
In any case, good luck with your move!
I'm not sure how many home birth midwives are in the area, but I did have a friend who had a home birth with a midwife in Ashland, so I know there's at least one. My guess would be that Ashland would be very midwife-friendly since it's such a crunchy town. There are lots of home schoolers in Oregon, and home school groups. You would probably find more resources in the Salem area than the Ashland area, but I'm sure there's something. The laws are fairly reasonable about it, I think you have to take a test at the third grade level and score within the top 80% (you can arrange to retake it 3 times I believe)-and then there are tests for upper grades as well (I don't remember each one, it's every 2-3 years, maybe..). I'm pretty sure you can find the info if you go to the education website for Oregon. I've looked into homeschooling but DD is only 3 so, I don't know all the ins and outs of the system yet.
My Salem and especially Portland (which is reasonably close to Salem) are wonderful places to home school in terms of programs and resources (there's a ton of stuff out there), but I think Ashland could be a pretty great place to home school, too. With the Shakespeare festival, the University being there, and all the outdoor opportunities it could be pretty awesome :)