Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,080 |
| 1 Bedroom | $2,170 |
| 2 Bedrooms | $2,400 |
| 3 Bedrooms | $3,060 |
| 4 Bedrooms | $3,600 |
| 5 Bedrooms | $4,176 |
| 6 Bedrooms | $4,677 |
| 7 Bedrooms | $5,051 |
| 8 Bedrooms | $5,304 |
The analysis of the Section 8 program in ZIP code 20240, Washington, DC, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 20240 in fiscal year 2024 is set at $1980 per month, while the median rent in the area is $1268 per month, according to recent data. This indicates that the FMR is approximately $712 higher than the market rent, which represents a 56% increase.
The discrepancy between these figures suggests that voucher tenants can be a lucrative opportunity for landlords and small-portfolio investors. By accepting Section 8 vouchers, property owners can charge closer to the FMR rate of $1980, significantly above the local average of $1268. This makes it a yield play, allowing landlords to benefit from higher rental income than they might otherwise receive in the open market.
However, the decision to accept Section 8 tenants should also consider the broader economic context of ZIP 20240. The median home value in the area is lower than the national average, standing at $281,900 compared to $281,900 nationally. Additionally, the median income in ZIP 20240 is not provided, but based on the national average, it would likely be around $75,149 per year. Given these factors, the cost of housing voucher tenants below open-market rates can still be a viable strategy, especially considering that 35.2% of residents are renters, slightly above the U.S. average of 34.3%.
In summary, the gap between FMR and market rent in ZIP 20240 makes it a prime location for landlords to maximize their rental yields through Section 8 participation. While the economic indicators suggest a mixed environment, the potential for higher rental income outweighs the costs associated with housing voucher tenants.
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.