Location: Daphne-Fairhope-Foley, AL | Metro: Daphne-Fairhope-Foley, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,180 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,850 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 36550 are straightforward. The SAFMR (Section 8 Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP is set at $1090 per month for the fiscal year 2024. This figure represents the maximum amount that the housing authority will pay landlords participating in the program.
To understand how this works, consider the components of the voucher payment. Tenants are typically required to contribute 30% of their adjusted income towards rent. If we assume an average adjusted income of $1817 per month (based on the calculation where $1090 is 70% of the total), then the tenant would pay approximately $545 toward rent. The remaining amount, which is the subsidy from the housing authority, would be $545 in this case.
In addition to the rent subsidy, there are utility allowances. These vary but generally cover a significant portion of the tenant's electricity, gas, water, and sewer costs. For simplicity, let’s say the utility allowance averages around $200 per month. This allowance does not come directly out of the SAFMR but is paid separately by the housing authority to the tenant.
Thus, when a landlord receives a tenant with a Section 8 voucher, they can expect to receive a fixed payment of $1090 per month from the housing authority, plus the tenant's contribution of about $545. The total monthly rental income for a two-bedroom unit would be $1635. However, since the local market rent data is not available, it's challenging to provide a direct comparison. But based on the SAFMR alone, landlords should be aware that their income might be lower than what could potentially be earned in the private market.
The reimbursement gap or surplus is the difference between the market rent and the combined amount of the housing authority's payment and the tenant's contribution. In ZIP 36550, without specific local market rent data, we can only rely on the SAFMR to suggest that landlords might face a gap if the market rent exceeds $1635 per month. Conversely, if the market rent is less than this amount, landlords would have a surplus.
For clarity:
This analysis provides a clear picture of the financials involved in accepting Section 8 tenants for a two-bedroom property in ZIP 36550. Landlords must weigh the benefits of guaranteed payments against the potential for earning higher rents in a competitive market.
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.