Location: New York, NY | Metro: New York, NY 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 | $2,480 |
| 1 Bedroom | $2,610 |
| 2 Bedrooms | $2,840 |
| 3 Bedrooms | $3,590 |
| 4 Bedrooms | $3,940 |
| 5 Bedrooms | $4,570 |
| 6 Bedrooms | $5,118 |
| 7 Bedrooms | $5,527 |
| 8 Bedrooms | $5,803 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,610 | $348,658 | 0.75% | D |
| 2BR | $2,840 | $426,780 | 0.67% | D |
| 3BR | $3,590 | $570,738 | 0.63% | D |
| 4BR | $3,940 | $757,744 | 0.52% | F |
| 5BR | $4,570 | $907,231 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 10509 in Brewster, NY, reveals a significant discrepancy between government-subsidized rental income and market rents. Using the Fair Market Rent (FMR) for a 2-bedroom unit at $2710 annually, the implied gross yield for a property valued at $518,634 would be approximately 0.52%. This calculation is derived from dividing the annual FMR by the median home value. In contrast, using the Zillow Observed Rent Index (ZORI) of $1,850 for a monthly market rent, the annualized market rent is $22,200, resulting in an implied gross yield of 4.28%.
The stark difference between these two yields highlights the financial realities faced by landlords participating in the Section 8 program versus those leasing properties at market rates. The lower gross yield associated with the Section 8 FMR suggests that landlords must carefully consider the additional administrative burdens and potential maintenance costs when deciding whether to enroll in the program.
Given the 21.2% renter density in Brewster, it's evident that a considerable portion of the population may rely on rental assistance programs like Section 8. However, the N/A-day Days on Market (DOM) indicates incomplete data regarding how quickly properties are rented out, which could imply either a very tight or very loose rental market depending on other factors not covered here.
In conclusion, while the Section 8 scenario presents a significantly lower gross yield of 0.52%, compared to the 4.28% from market rents, the actual performance can vary based on local demand and the proportion of tenants eligible for Section 8. Landlords should weigh these figures against the operational challenges and benefits of each rental model.
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.