Location: Palm Bay-Melbourne-Titusville, FL | Metro: Palm Bay-Melbourne-Titusville, FL 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 | $1,600 |
| 1 Bedroom | $1,840 |
| 2 Bedrooms | $2,150 |
| 3 Bedrooms | $2,880 |
| 4 Bedrooms | $3,270 |
| 5 Bedrooms | $3,793 |
| 6 Bedrooms | $4,248 |
| 7 Bedrooms | $4,588 |
| 8 Bedrooms | $4,817 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,150 | $203,601 | 1.06% | B |
| 3BR | $2,880 | $291,302 | 0.99% | C |
| 4BR | $3,270 | $339,717 | 0.96% | C |
| 5BR | $3,793 | $384,669 | 0.99% | C |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 32908, located in Palm Bay, Florida, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1600, while the market rent, as measured by the Zillow Rent Index (ZORI), stands at $2,051. This means there is a $451 difference, representing a 28.1% gap between what landlords can charge voucher tenants and the open-market rental rates.
In Palm Bay, where only 10.2% of residents are renters, landlords participating in the Section 8 program must consider the implications of renting below market rates. The median home value in the area is $316,933, and the median income is $79,596, indicating a relatively stable housing market. However, the disparity between the FMR and market rent suggests that landlords may be leaving money on the table when they choose to accept Section 8 vouchers.
The cost of housing voucher tenants below open-market rates is clear: landlords receive less rent than they could potentially earn from non-voucher tenants. In ZIP 32908, accepting a tenant with an FMR of $1600 instead of renting to someone willing to pay the market rate of $2,051 means a landlord loses out on $451 per month, or approximately $5,412 annually. This figure is substantial and can significantly impact the cash flow and overall profitability of a property.
Despite these costs, some landlords might still find the Section 8 program attractive due to its guaranteed rent payments and the stability it offers. The program provides a steady stream of income that is essential for small-portfolio investors who may not have the financial buffer to withstand periods of vacancy or late payments. However, the decision to participate should be carefully weighed against the potential loss of revenue.
To summarize, the gap between the FMR and market rent in ZIP 32908 is $451, or 28.1%. Landlords must evaluate whether the benefits of the Section 8 program outweigh the financial cost of renting below market rates. Given the broader context of Palm Bay's housing market, this gap represents a notable opportunity cost for landlords and small-portfolio investors.
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.