Section 8 Fair Market Rent (FMR) for ZIP 16541 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 housing in ZIP code 16541, located in Erie County, Pennsylvania, are straightforward. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code is set at $980 for fiscal year 2024. This figure is crucial because it directly influences the maximum amount a landlord can expect to receive from the housing authority.

A Section 8 voucher operates on a principle where the tenant is responsible for paying approximately 30% to 40% of their adjusted income towards rent. For simplicity, let's assume a 35% contribution. If the local market rent for a two-bedroom unit is currently unknown, we will use the SAFMR as our baseline for analysis.

The voucher program also includes utility allowances, which are additional payments made by the housing authority to cover the cost of utilities. These allowances vary but are typically around $200 per month for a two-bedroom unit. Therefore, when calculating the total reimbursement, you must consider both the tenant's rent payment and the utility allowance.

If a tenant's adjusted income is $1,500 per month, they would pay 35%, or $525, toward the rent. With the utility allowance of $200, the total reimbursement to the landlord would be $725 per month. This leaves a significant gap between the SAFMR and the actual reimbursement received by the landlord.

To bridge this gap, landlords might need to adjust their expectations or seek additional sources of income. However, the SAFMR serves as a cap, meaning even if the market rent is higher, the housing authority will not reimburse beyond this limit.

In ZIP 16541, the typical reimbursement for a two-bedroom unit would fall short of the SAFMR. Specifically, the reimbursement gap is $255 ($980 - $725), indicating that landlords must either accept a lower rental income or find ways to reduce costs to remain financially viable under the Section 8 program.

This scenario highlights the importance of understanding the financial dynamics of Section 8 before entering into a lease agreement. Landlords should carefully assess their expenses and ensure that the reimbursement, while not covering the full SAFMR, still allows them to maintain their properties and operations.

Data Sources: FMR data from HUD (2027).

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.