Location: Cleveland, OH | Metro: Cleveland, OH HUD Metro FMR Area
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 | $1,390 |
| 1 Bedroom | $1,570 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,440 |
| 4 Bedrooms | $2,630 |
| 5 Bedrooms | $3,051 |
| 6 Bedrooms | $3,417 |
| 7 Bedrooms | $3,690 |
| 8 Bedrooms | $3,875 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,440 | $545,441 | 0.45% | F |
| 4BR | $2,630 | $767,203 | 0.34% | F |
| 5BR | $3,051 | $1,141,077 | 0.27% | F |
U.S. Census Bureau data (2024)
The ZIP code 44040 is situated in a high-income, predominantly owner-occupied neighborhood. With a total population of 3,063, only 3.1% of residents are renters, indicating a strong preference for homeownership in the area. The median household income stands at a robust $228,942, reflecting the affluent nature of the community. Additionally, the median home value is notably high at $699,391, further underscoring the upscale character of the housing market.
When it comes to rental economics, the disparity between Federal Market Rent (FMR) and actual market rents is significant. For fiscal year 2024, the FMR for ZIP 44040 is set at $1,360, which is considerably lower than the average market rent of $2,875 as reported by the Census Bureau's American Community Survey (ACS). This gap highlights the potential challenges for landlords who rely solely on Section 8 vouchers, as the rental subsidies may not cover the full cost of renting in such an expensive market.
The question then arises whether this ZIP code is suitable for a hands-off voucher operator or if it demands a more hands-on value-add approach. Given the low percentage of renters and the high median income levels, hands-off operators might struggle to find enough tenants willing to accept the lower Section 8 rates. On the other hand, value-add buyers could potentially succeed by targeting a niche market of lower-income individuals who can afford the higher rents through government assistance. However, they would need to be prepared to manage properties carefully and possibly renovate to meet the expectations of both voucher recipients and the local market standards.
In summary, ZIP 44040 presents a challenging environment for landlords looking to operate purely on Section 8 vouchers due to the significant difference between subsidized and market rents. It is better suited for hands-on investors who can add value and manage properties effectively to cater to the limited but potentially lucrative rental market segment.
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.