Location: Montgomery, AL | Metro: Montgomery, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,300 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,520 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 36115 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1,630, while the Census ACS data indicates that the average market rent is $1,405. This means that the FMR is $225 higher than the market rent, representing an increase of approximately 16%. The discrepancy between these two figures has important implications for landlords and small-portfolio investors.
When the FMR exceeds the market rent, it transforms the area into a yield play for voucher tenants. Landlords can expect a higher rental income than what the market would typically offer, making it financially advantageous to accept Section 8 tenants. The guaranteed payment from the Housing Choice Voucher program ensures a steady cash flow, which can be particularly beneficial in a zip code where 100.0% of residents are renters and the median income is $63,672. Given these conditions, the demand for affordable housing is high, and accepting Section 8 vouchers can help landlords capitalize on this demand.
However, the cost of housing voucher tenants below open-market rates must also be considered. While the FMR provides a higher rental rate, landlords might face additional administrative burdens and potential maintenance costs associated with managing voucher tenants. It's essential to weigh these factors against the benefits of receiving a stable, government-backed rental income that is above the typical market rate.
In ZIP 36115, the high percentage of renters and the relatively low median income highlight the critical role that Section 8 plays in providing affordable housing options. Accepting Section 8 vouchers allows landlords to participate in a program that supports tenants who might otherwise struggle to afford decent housing. Despite the lack of data on median home values, the economic context suggests that landlords can leverage the FMR to achieve better financial returns compared to the local market rent.
Data Sources: FMR data from HUD (2027). 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.