Location: Bergen-Passaic, NJ | Metro: Bergen-Passaic, NJ HUD Metro FMR Area
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 | $1,660 |
| 1 Bedroom | $1,860 |
| 2 Bedrooms | $2,140 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $3,280 |
| 5 Bedrooms | $3,805 |
| 6 Bedrooms | $4,262 |
| 7 Bedrooms | $4,603 |
| 8 Bedrooms | $4,833 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,140 | $517,087 | 0.41% | F |
| 3BR | $2,600 | $597,986 | 0.43% | F |
| 4BR | $3,280 | $626,138 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 07026, which encompasses Garfield, New Jersey, is centered around the disparity between the Fair Market Rent (FMR) set at $1750 for the fiscal year 2024 and the actual market rent, measured by Zillow's Observed Rent Index (ZORI), which stands at $2,424. This creates a significant gap of $674, or approximately 39%, between what landlords can charge and what the government will subsidize through the housing voucher program.
In Garfield, where 55.3% of residents are renters and the median home value is $579,887, the lower FMR compared to the market rent means that landlords accepting Section 8 vouchers will be renting their properties below the open-market rates. Given the median income in Garfield is $79,700, it's evident that many residents rely heavily on subsidized housing options to afford living in the area.
The cost of housing voucher tenants below open-market rates lies in the reduced rental income. For instance, if a landlord charges the FMR of $1750, they are foregoing an additional $674 per month that could be earned from market-rate tenants. However, the advantage of Section 8 tenants is the guaranteed payment from the government, even if it's at a lower rate. This can provide a stable and predictable cash flow, especially valuable in a high-rent environment like Garfield.
To summarize, the gap between the FMR and market rent in Garfield, NJ, makes it a challenging scenario for landlords seeking maximum yield. Accepting Section 8 vouchers means sacrificing a portion of potential rental income, but it ensures a reliable tenant base and consistent revenue, which can be crucial in maintaining property occupancy and financial stability.
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.