Location: Montgomery, AL | Metro: Montgomery, AL 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 | $1,020 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,770 |
| 5 Bedrooms | $2,053 |
| 6 Bedrooms | $2,299 |
| 7 Bedrooms | $2,483 |
| 8 Bedrooms | $2,607 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,530 | $241,269 | 0.63% | D |
| 4BR | $1,770 | $281,169 | 0.63% | D |
U.S. Census Bureau data (2024)
The median income in ZIP code 36025 stands at $54,414, which makes it challenging for many households to afford the market rate rent of $1,122. This figure represents a significant portion of their monthly earnings, indicating a strain on household budgets. The Family Monthly Income (FMI) used for calculating Housing Choice Voucher payments, however, is set slightly higher at $1,170. This suggests that while the market rate is already high, voucher payments could potentially offer a more stable and reliable source of income for landlords.
To put this into perspective, let’s break down the numbers. A household earning the median income would spend approximately 24% of their gross monthly income on market rate rent. When considering the voucher payment standard, this percentage increases to about 25%, but the key difference lies in the consistency and reliability of voucher payments versus those made by tenants paying cash out-of-pocket.
In ZIP 36025, with a total population of 7,450 and 24.7% of residents being renters, the competition among landlords is relatively moderate. However, the affordability gap means that landlords who accept vouchers might have an edge over those who do not, especially in areas where tenants struggle to meet market rates. Vouchers ensure a steady stream of rental income, reducing the risk of unpaid rent and increasing tenant stability.
For landlords considering their strategy, the decision to accept vouchers versus relying solely on cash-paying tenants should be carefully weighed. While cash-paying tenants might offer slightly higher rents, the security and predictability of voucher payments can provide a more stable business model. Landlords should also consider the broader economic context and the potential for increased demand from voucher holders if the affordability gap continues to widen.
In conclusion, given the financial pressures on renters in ZIP 36025, accepting vouchers can be a strategic advantage. It not only helps fill units but also ensures a consistent income stream, making it a viable option for landlords looking to balance between market rates and the benefits of voucher programs.
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.