Location: Newark, NJ | Metro: Newark, 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 | $1,940 |
| 1 Bedroom | $2,190 |
| 2 Bedrooms | $2,640 |
| 3 Bedrooms | $3,290 |
| 4 Bedrooms | $3,770 |
| 5 Bedrooms | $4,373 |
| 6 Bedrooms | $4,898 |
| 7 Bedrooms | $5,290 |
| 8 Bedrooms | $5,555 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,640 | $526,160 | 0.5% | F |
| 3BR | $3,290 | $691,004 | 0.48% | F |
| 4BR | $3,770 | $816,880 | 0.46% | F |
| 5BR | $4,373 | $910,239 | 0.48% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 07054, Parsippany, New Jersey, involve understanding the balance between the SAFMR (Small Area Fair Market Rent) and the local market rent. For a two-bedroom apartment, the SAFMR for FY 2024 is set at $2200. This figure represents the maximum amount that the government will pay towards the rent subsidy for a unit in this specific ZIP code. The local market rent, as measured by ZORI (Zillow Observed Rent Index), is $2,637. This indicates that landlords could potentially charge more than the SAFMR if they choose to.
A Section 8 voucher pays a portion of the rent based on the SAFMR, but the total reimbursement to the landlord includes both the tenant's contribution and any utility allowances. Typically, tenants contribute 30% of their adjusted income toward rent. If we assume an average adjusted income of $1,500 per month for a tenant in this area, their contribution would be $450 ($1,500 x 0.30).
The remaining amount, up to the SAFMR of $2200, is covered by the government. Therefore, the government would pay $1750 ($2200 - $450) directly to the landlord. Utility allowances vary but can typically cover an additional $200-$300 per month, depending on the tenant’s needs and the state guidelines. For simplicity, let's use an average utility allowance of $250. This brings the total reimbursement to the landlord to $2000 ($1750 + $250).
In ZIP 07054, where the local market rent is $2,637, this means there is a reimbursement gap of $637 per month. Landlords must decide whether to accept the lower reimbursement or seek non-voucher tenants willing to pay the higher market rate. The decision often depends on factors such as the property's condition, location, and competition from other landlords who may also be participating in the Section 8 program.
To summarize, landlords in ZIP 07054 receive a reimbursement of $2000 per month for a two-bedroom apartment under a Section 8 voucher, which is significantly less than the local market rent of $2,637. This results in a monthly reimbursement gap of $637 for landlords choosing to participate in the 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.