Location: Nassau-Suffolk, NY | Metro: Nassau-Suffolk, 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 | $2,100 |
| 1 Bedroom | $2,440 |
| 2 Bedrooms | $2,870 |
| 3 Bedrooms | $3,690 |
| 4 Bedrooms | $3,920 |
| 5 Bedrooms | $4,547 |
| 6 Bedrooms | $5,093 |
| 7 Bedrooms | $5,500 |
| 8 Bedrooms | $5,775 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,870 | $707,214 | 0.41% | F |
| 3BR | $3,690 | $760,481 | 0.49% | F |
| 4BR | $3,920 | $924,553 | 0.42% | F |
| 5BR | $4,547 | $1,194,714 | 0.38% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 11733, specifically Setauket, NY, is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 11733 in fiscal year 2024 is set at $3100, whereas the market rent, as indicated by the Zillow Observed Rent Index (ZORI), stands at $3925. This creates a gap of $825, or approximately 26.5%, between what landlords can charge and what they are reimbursed under the Section 8 program.
In Setauket, where only 15.0% of residents are renters and the median home value is $844,217, the lower rental participation rate suggests that the majority of residents own their homes. Additionally, the median income of $173,281 indicates a relatively affluent area, which further emphasizes the significance of the rental income gap. For landlords, accepting Section 8 tenants means renting out properties at a rate that is $825 less than the market average, potentially impacting profitability.
This scenario makes Setauket a challenging environment for landlords who rely on rental income to generate yields. While the FMR is designed to ensure affordable housing, it falls short of the market rent, leaving landlords with a choice: either accept the lower reimbursement rate or seek non-voucher tenants willing to pay the higher market rent. The decision to participate in the Section 8 program must be weighed against the potential loss in revenue, especially given the high median home values and incomes in the area.
To illustrate, if a landlord has a property that could command $3925 per month in the open market but chooses to rent it through the Section 8 program, they would receive only $3100. This difference represents a significant reduction in monthly cash flow, amounting to a 21% decrease from the potential market rent. Given these numbers, landlords and small-portfolio investors must carefully consider the financial implications of participating in the Section 8 program in Setauket.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.