Location: San Juan-Guaynabo, PR | Metro: San Juan-Guaynabo, PR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 00966 is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1000, while the Census American Community Survey (ACS) indicates that the market rent is $1,121. This represents a gap of $121, or approximately 12.1%, between what landlords can charge voucher tenants and the open-market rental rate.
Given that the FMR is less than the market rent, landlords accepting Section 8 vouchers will be renting properties below the open-market rates. In the context of , CT, where 27.1% of residents are renters and the median household income is $60,203, this scenario poses a challenge for landlords. The lower FMR means that landlords must either accept a reduced rental income or find ways to subsidize the difference, which can impact their overall yield.
To illustrate, if a landlord charges the full market rent of $1,121 but only receives the FMR payment of $1000 from the voucher program, they would need to cover the remaining $121 from other sources. This could mean reducing profit margins, seeking additional subsidies, or increasing the number of units to achieve higher yields. Conversely, landlords who decide to charge the FMR rate of $1000 might see an increase in demand from voucher holders, but this comes at the expense of foregoing the higher market rent of $1,121.
In conclusion, the gap between the FMR and market rent in ZIP 00966 is significant and requires careful consideration by landlords and small-portfolio investors. The decision to participate in the Section 8 voucher program should weigh the benefits of guaranteed payments against the potential reduction in rental income. Given the economic conditions in , CT, landlords must strategize to ensure that their investment decisions align with the local rental market dynamics and their financial goals.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.