Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 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 | $1,130 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,460 |
| 3 Bedrooms | $1,740 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,460 | $81,368 | 1.79% | A+ |
| 3BR | $1,740 | $69,469 | 2.5% | A+ |
| 4BR | $1,920 | $107,049 | 1.79% | A+ |
| 5BR | $2,227 | $161,831 | 1.38% | A |
U.S. Census Bureau data (2024)
The Section 8 analysis for ZIP code 19132 in Philadelphia, PA, highlights a discrepancy between the Fair Market Rent (FMR) and the Zillow Observed Rent Index (ZORI). The FMR for ZIP 19132 in fiscal year 2024 is set at $1340, while the ZORI stands at $1380. This results in a $40 gap, representing approximately 2.98% of the market rent.
In Philadelphia, where 51.1% of residents are renters and the median home value is $69,979, landlords must consider the implications of this gap. With a median income of $32,823, many potential tenants rely on housing vouchers to afford their homes. When the FMR is lower than the market rent, as it is here, landlords accept a reduction in rental income to participate in the voucher program.
The cost of housing voucher tenants below open-market rates means that landlords must balance the benefits of guaranteed rent payments with the reduced revenue. For instance, if a landlord charges the FMR of $1340 instead of the market rate of $1380, they lose $40 per month per unit. Over a year, this amounts to a loss of $480 per unit, which can significantly impact the overall yield of an investment portfolio.
Despite the financial implications, the stability provided by the Section 8 program can be attractive. Tenants who receive vouchers are often more reliable in terms of timely rent payments and maintaining property standards. However, the gap between FMR and market rent underscores the importance of understanding the financial trade-offs involved in renting to voucher holders.
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.