Location: Northeastern Connecticut Planning Region, CT | Metro: Northeastern Connecticut Planning Region, CT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,110 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,170 |
| 5 Bedrooms | $2,517 |
| 6 Bedrooms | $2,819 |
| 7 Bedrooms | $3,045 |
| 8 Bedrooms | $3,197 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 06332 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1370, while the Census ACS reports the market rent at $1,227. This indicates that the FMR is higher than the market rent by $143, or approximately 11.7%.
The discrepancy suggests that landlords and small-portfolio investors can benefit from participating in the Section 8 program. The higher FMR means that voucher tenants can potentially pay above the current market rate, making this a yield play. By renting to Section 8 tenants, landlords can achieve a higher rental income than what they might receive from non-voucher tenants in the same area.
In ZIP 06332, 43.6% of residents are renters, indicating a substantial portion of the population relies on rental housing. However, the median income is relatively low at $61,840. This economic context underscores the importance of the Section 8 program for ensuring affordable housing options for many residents. Despite the lower median income, the FMR being higher than the market rent allows landlords to receive a guaranteed payment that exceeds the typical rent in the area.
The cost of housing voucher tenants below open-market rates is minimal given the structure of the program. Landlords do not have to worry about collecting rent directly from tenants, as the Housing Authority covers the portion of the rent not paid by the tenant. This reduces the risk of unpaid rent and provides a stable income stream for landlords.
To summarize, the gap between the FMR and market rent in ZIP 06332 presents an opportunity for landlords and small-portfolio investors to increase their yields by participating in the Section 8 program. The higher FMR ensures that landlords receive a competitive rental income, which is particularly beneficial in an area where the median income is low and a large percentage of the population are renters.
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.