Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
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 | $2,460 |
| 1 Bedroom | $2,570 |
| 2 Bedrooms | $2,840 |
| 3 Bedrooms | $3,620 |
| 4 Bedrooms | $4,260 |
| 5 Bedrooms | $4,942 |
| 6 Bedrooms | $5,535 |
| 7 Bedrooms | $5,978 |
| 8 Bedrooms | $6,277 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,570 | $330,404 | 0.78% | D |
| 2BR | $2,840 | $621,030 | 0.46% | F |
| 3BR | $3,620 | $1,291,174 | 0.28% | F |
| 4BR | $4,260 | $1,705,016 | 0.25% | F |
| 5BR | $4,942 | $2,595,286 | 0.19% | F |
U.S. Census Bureau data (2024)
The ZIP code 20016 is situated in a vibrant and diverse neighborhood of Washington, DC, characterized by a significant population of 32,730 residents. With 35.4% of the populace renting their homes, it's evident that there is a notable demand for rental properties in the area. The neighborhood boasts a high median household income of $178,920, which suggests a well-to-do demographic. Reflecting this affluence, the median home value in ZIP 20016 stands at an impressive $1,119,413, indicating a robust real estate market.
Moving into the specifics of rental economics, the Fair Market Rent (FMR) for ZIP 20016 in fiscal year 2024 is set at $2,310. This figure contrasts sharply with the actual market rent, as indicated by Zillow's Observed Rental Index (ZORI), which is $2,956. The disparity between these two numbers points to a scenario where Section 8 vouchers might not fully cover the cost of renting a property at market rates, leaving landlords to absorb the difference or seek alternative strategies to maintain profitability.
Given the economic landscape, ZIP 20016 may be less suitable for hands-off voucher operators due to the potential financial gap between FMR and market rents. Instead, the area seems better aligned with hands-on value-add buyers who can manage properties more actively, potentially through renovations or strategic pricing, to maximize returns. These investors would need to carefully assess the local market conditions and consider the higher income levels of residents when evaluating investment opportunities.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.