Location: Scranton--Wilkes-Barre, PA | Metro: Scranton--Wilkes-Barre, 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 | $880 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,650 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,260 | $206,656 | 0.61% | D |
| 3BR | $1,650 | $256,946 | 0.64% | D |
| 4BR | $1,810 | $291,867 | 0.62% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis for Tunkhannock, Pennsylvania (ZIP 18657) is based on the discrepancy between the Fair Market Rent (FMR) set at $1050 and the actual market rent of $942, according to the latest Census ACS data for the fiscal year 2024. This gap stands at $108, or approximately 11.4%, indicating that landlords can potentially benefit from higher rental incomes when compared to the open-market rates.
In Tunkhannock, where 25.0% of residents are renters and the median home value is $232,772, the opportunity lies in the fact that the government compensates at a rate above the prevailing market conditions. Given the median income in the area is $75,317, it's reasonable to assume that many potential tenants would be eligible for housing vouchers due to the relatively high cost of living relative to their income.
The FMR being higher than the market rent makes Tunkhannock a yield play for landlords who accept Section 8 vouchers. By participating in the program, they can command rents that are closer to the FMR, thus achieving a higher rental income than what the open market currently offers. This is particularly beneficial considering the local economic context where the demand for affordable housing is likely high given the median income levels and the percentage of renters in the community.
However, landlords must also consider the potential costs associated with housing voucher tenants. These include administrative overheads, such as the application process and ongoing compliance with HUD regulations. Despite these considerations, the financial incentive of receiving rents at or near the $1050 FMR level outweighs the costs in an environment where the average market rent is significantly lower.
To summarize, the Section 8 program in Tunkhannock provides a unique opportunity for landlords to increase their rental yields by $108 per month, or 11.4%, over the typical market rate. This plays into the broader economic dynamics of the region, making it a strategic investment for those looking to capitalize on the affordable housing needs of local residents.
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.