Location: Northwest Hills Planning Region, CT | Metro: Waterbury-Shelton, 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 | $1,130 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $1,990 |
| 4 Bedrooms | $2,350 |
| 5 Bedrooms | $2,726 |
| 6 Bedrooms | $3,053 |
| 7 Bedrooms | $3,297 |
| 8 Bedrooms | $3,462 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,610 | $410,129 | 0.39% | F |
| 3BR | $1,990 | $527,604 | 0.38% | F |
| 4BR | $2,350 | $623,290 | 0.38% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 06751, located in Bethlehem, CT, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2026, the FMR is set at $1,500, while the Census ACS reports the average market rent at $1,127. This means that the FMR is $373 higher than the market rent, representing an increase of approximately 33%. The disparity highlights the potential benefits for landlords and small-portfolio investors who choose to accept Section 8 vouchers.
In Bethlehem, where 29.8% of residents are renters, the median home value stands at $507,733, and the median income is $108,929. Given these figures, it's evident that the local rental market could be seen as undervalued compared to the FMR. Landlords who participate in the Section 8 program can capitalize on this gap, earning a higher yield than what the open market offers. This is particularly attractive in an area where the median income is relatively high, indicating a strong financial position among residents despite the percentage of renters.
The higher FMR in relation to market rent also suggests that voucher tenants provide a stable source of income, which is crucial for small-portfolio investors looking to maximize returns. The guaranteed payment through the voucher system, coupled with the government's role in covering any shortfall between the market rate and the FMR, makes it a favorable option for property owners. However, it's important to note that accepting Section 8 vouchers might come with additional administrative responsibilities and compliance requirements.
Bethlehem's context further supports this yield play. With a median home value significantly above the national average, the rental market reflects a lower portion of the overall housing costs. Therefore, landlords can leverage the Section 8 program to receive rents closer to the FMR, thereby increasing their profitability. The high median income indicates that there is a substantial economic base in the area, which can support higher rents and thus benefit those who choose to participate in the voucher program.
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.