Location: Utica-Rome, NY | Metro: Utica-Rome, NY MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 13319 might raise several valid concerns regarding the feasibility of investing in this area through the lens of Section 8 housing. Here, we dissect those concerns with the available data.
Objection 1: Will the Fair Market Rent (FMR) of $910 cover the mortgage on a $186,828 home?
The FMR of $910 for ZIP 13319 in fiscal year 2024 is a critical figure for determining if a Section 8 investment can be profitable. To address this concern, let's consider the average interest rate for a fixed-rate mortgage, which is currently around 5%. A mortgage on a $186,828 home at this rate would result in monthly payments of approximately $1,000, assuming a 30-year term and no down payment. Therefore, the FMR of $910 does not fully cover the mortgage payment. However, it's important to note that many investors require a down payment or have already made an initial investment, reducing their monthly mortgage burden. Additionally, the FMR can increase over time, potentially covering more of the mortgage cost in future years.
Objection 2: Is there enough renter demand at 33.7%?
The rental demand in ZIP 13319 stands at 33.7%, which might seem low to some investors. This percentage indicates that a significant portion of the housing stock is owner-occupied rather than rented out. However, this metric alone doesn't provide a complete picture of the rental market's health. The actual number of renters and the vacancy rate would give a clearer understanding of whether there is sufficient demand to support Section 8 properties. While the data does not specify these numbers, a 33.7% rental rate suggests that there is still a notable segment of the population looking for rental properties. It's also worth noting that Section 8 tenants often have a strong preference for stable housing, which could mean higher tenant retention rates compared to non-subsidized rentals.
Objection 3: Will vouchers keep pace with $680 market rents?
The market rent of $680 in ZIP 13319 is below the FMR of $910, indicating that the voucher amount is likely sufficient to cover the market rent. However, the question of whether vouchers will keep pace with increasing market rents is a valid concern. Historically, the U.S. Department of Housing and Urban Development (HUD) adjusts the FMR annually based on changes in the local rental market. If the market rent increases significantly, HUD would need to adjust the FMR accordingly. Given the current FMR is above the market rent, there is some cushion for minor fluctuations. But for major changes, investors must stay informed about annual adjustments to the FMR to ensure continued profitability.
In summary, while the FMR of $910 may not fully cover the mortgage on a $186,828 home without additional considerations such as down payments, the rental demand at 33.7% suggests a viable market. Vouchers are currently adequate to cover the $680 market rent, but long-term viability depends on HUD's ability to adjust the FMR with rising market rents. These points should be carefully weighed when making an investment decision in ZIP 13319.
Data Sources: FMR data from HUD (2027). 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.