Location: Springfield, MA | Metro: Springfield, MA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,310 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,870 |
| 3 Bedrooms | $2,330 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 01009 is centered around the relationship between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1290, while the Census American Community Survey (ACS) reports the market rent as $1286. This indicates that the FMR is slightly above the market rent, creating a gap of $4, which translates to approximately 0.31%.
In the context of Delaware, where 40.7% of residents are renters and the median household income is $72,841, this slight edge in FMR over market rent makes ZIP 01009 a yield play for landlords and small-portfolio investors. The higher FMR means that voucher tenants can potentially cover rents that are marginally above the average market rate, thus providing a small but significant boost to rental yields.
However, it's important to note that the median home value in the area is listed as N/A, which could indicate a lack of available data or an absence of owner-occupied homes. This detail underscores the importance of rental properties in the area and highlights the reliance on rental units for housing.
The slight advantage in FMR over market rent is critical because it allows landlords to charge slightly higher rents without pricing out potential voucher tenants. This can be particularly beneficial given the median income levels in the area. Landlords should be aware that while the gap is minimal, it can still contribute positively to their bottom line when dealing with voucher tenants who are guaranteed by the government to pay up to the FMR.
Investors should also consider that despite the small gap, the overall financial landscape of ZIP 01009 supports the viability of Section 8 properties. With a high percentage of renters and a median income that aligns well with the rent levels, there is a strong demand for affordable housing options. Thus, the slight increase in FMR can serve as a buffer against the costs associated with managing Section 8 properties, such as administrative overhead and potential delays in payment processing.
In summary, the gap between FMR and market rent in ZIP 01009 is narrow but meaningful. It presents an opportunity for landlords and small-portfolio investors to achieve slightly better yields while still being competitive in the local rental market. This is especially true in a state like Delaware, where the rental sector plays a crucial role in providing housing solutions for a significant portion of the population.
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.