Location: New Haven, CT | Metro: New Haven, CT MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,750 |
| 1 Bedroom | $1,890 |
| 2 Bedrooms | $2,270 |
| 3 Bedrooms | $2,820 |
| 4 Bedrooms | $3,190 |
| 5 Bedrooms | $3,700 |
| 6 Bedrooms | $4,144 |
| 7 Bedrooms | $4,476 |
| 8 Bedrooms | $4,700 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,890 | $164,431 | 1.15% | B |
| 2BR | $2,270 | $260,476 | 0.87% | C |
| 3BR | $2,820 | $362,109 | 0.78% | D |
| 4BR | $3,190 | $404,522 | 0.79% | D |
| 5BR | $3,700 | $463,372 | 0.8% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 06514 (Hamden, CT) can be analyzed using the Fair Market Rent (FMR) and the Zillow Observed Rent Index (ZORI) for a 2-bedroom apartment. For FY 2024, the annualized FMR for a 2BR in ZIP 06514 is $1820 * 12 = $21,840. The ZORI, representing the market rent, stands at $2,174 per month, or $26,088 annually.
To derive the implied gross yield, we use the median home value of $338,170. When considering the FMR, the gross yield is calculated as follows:
$21,840 / $338,170 = 0.0646 or 6.46%
Using the ZORI for the market rent, the gross yield is:
$26,088 / $338,170 = 0.0772 or 7.72%
The gross yield based on the ZORI is higher, indicating that market rents offer a better return on investment compared to Section 8 rents. However, the decision to participate in the Section 8 program must also consider other factors such as renter density and the days on market (DOM).
With a renter density of 38.7%, there is a significant portion of the population that relies on rental housing, including those who might qualify for Section 8 assistance. This suggests a steady demand for rental properties in Hamden, CT. Additionally, the average DOM of 26 days indicates a quick turnover rate, which is favorable for landlords and investors as it minimizes vacancy periods and associated costs.
In conclusion, while the gross yield from market rents is more attractive at 7.72%, the stability provided by Section 8 tenants, combined with the relatively high renter density and short DOM, makes the 6.46% gross yield from Section 8 rents a viable option for investors looking for consistent income streams. The choice between market and Section 8 rents should be made based on individual risk tolerance and investment goals.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.