Location: Kalamazoo-Portage, MI | Metro: Kalamazoo-Portage, MI 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 | $860 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,490 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $980 | $116,738 | 0.84% | C |
| 2BR | $1,120 | $181,382 | 0.62% | D |
| 3BR | $1,490 | $265,571 | 0.56% | F |
| 4BR | $1,580 | $359,078 | 0.44% | F |
| 5BR | $1,833 | $397,310 | 0.46% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 49008, located in Kalamazoo, Michigan, within Kalamazoo County, are straightforward. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) is set at $990 per month for fiscal year 2024. This SAFMR reflects the rental rate specifically tailored for this ZIP code, ensuring it aligns closely with local conditions.
In comparison, the local market rent, measured by ZORI (Zillow Observed Rent Index), stands at $1,231 per month. This figure represents the average rent paid by tenants in the private market without any subsidies. It's important to note that the SAFMR is lower than the ZORI, indicating that landlords who participate in the Section 8 program will receive less than the market rate for their properties.
When a landlord signs up for a Section 8 voucher program, the reimbursement they receive is calculated based on the SAFMR minus the tenant's portion of the rent. The tenant's portion is typically 30% of their adjusted income, which can vary widely depending on the individual circumstances. However, for simplicity, let's assume the tenant's portion is $300 per month. In addition to the base rent, there are utility allowances that can add to the reimbursement. These allowances can range but are often around $200 per month.
This means the total reimbursement a landlord might expect from the Section 8 program for a two-bedroom unit would be the SAFMR plus the utility allowance. Therefore, the reimbursement would be $990 + $200 = $1,190 per month. If we subtract the tenant's portion, the net reimbursement to the landlord would be $1,190 - $300 = $890 per month.
To summarize the economic impact, a landlord participating in the Section 8 program for a two-bedroom apartment in ZIP 49008 would face a reimbursement gap of $341 per month, compared to the local market rent. This gap is the difference between the ZORI ($1,231) and the total reimbursement ($890).
It's crucial for landlords to understand these numbers before deciding to enter into a Section 8 agreement. While the program provides a steady stream of income, it also comes with a lower reimbursement rate than the private market. The decision should be made based on the specific financial needs and goals of the landlord, considering both the benefits and drawbacks of the program.
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.