Location: Erie, PA | Metro: Erie, PA MSA
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 | $760 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,100 | $171,911 | 0.64% | D |
| 3BR | $1,350 | $220,386 | 0.61% | D |
| 4BR | $1,520 | $254,220 | 0.6% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 16423, Lake City, PA, reveals some key insights into potential investment returns. Using the Fair Market Rent (FMR) for a two-bedroom apartment set at $860 annually for fiscal year 2024, and the market rent figure of $871 per month from the Census ACS, we can calculate the implied gross yields against the median home value of $203,177.
In the case of the FMR, the annualized rent would be $10,320 ($860 x 12 months). This translates to an implied gross yield of approximately 5.08%. The calculation is as follows: $10,320 / $203,177 = 0.0508, or 5.08%. For the market rent scenario, the annualized rent would be $10,452 ($871 x 12 months), resulting in an implied gross yield of about 5.14%. The calculation here is: $10,452 / $203,177 = 0.0514, or 5.14%.
Given that only 14.6% of residents are renters, the FMR scenario appears more realistic for this ZIP code. A lower renter density suggests that there might be fewer tenants willing to pay above the FMR, making the higher market rent less likely to be consistently achieved. Additionally, the N/A-day DOM (days on market) indicates either a very competitive rental market or a lack of available data, which further supports the idea that maintaining rents above the FMR could be challenging. Therefore, for investment purposes, it's prudent to consider the FMR-based gross yield of 5.08% as the more reliable metric for evaluating potential returns in Lake City, PA.
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.