Location: Grand Traverse County, MI | Metro: Grand Traverse County, MI 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 | $1,180 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,880 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,180 | $268,403 | 0.44% | F |
| 2BR | $1,430 | $336,299 | 0.43% | F |
| 3BR | $1,880 | $451,547 | 0.42% | F |
| 4BR | $1,920 | $707,049 | 0.27% | F |
| 5BR | $2,227 | $1,000,831 | 0.22% | F |
U.S. Census Bureau data (2024)
The ZIP code 49686, located in Traverse City, Michigan, presents an interesting scenario for both renters and landlords alike. The median household income in this area stands at $71,609. In comparison, the market rate for rent, known as the Zillow Observed Rent Index (ZORI), is set at $1,928 per month. This figure represents the average rental price for a typical home in the area.
However, when we consider the Federal Market Rent (FMR) for the metro area in fiscal year 2026, which is $1,370, it becomes evident that there is a significant gap between the market rate and the government-subsidized rent. This discrepancy highlights the challenge faced by low-income households who rely on housing vouchers to find affordable accommodation.
In ZIP 49686, approximately 27.5% of the residents are renters, and the total population is 25,492. Given these numbers, the affordability gap means that landlords might face stiff competition from those willing to accept lower rents through voucher programs. This is particularly true for properties that fall within the voucher payment standard range.
Landlords considering their strategy should be aware that while cash-paying tenants might offer higher rents, they also risk losing out to competitors who are willing to participate in the voucher program. Accepting voucher payments can secure a steady stream of reliable tenants, albeit at a lower monthly rate compared to the market. On the other hand, focusing solely on cash-paying tenants could limit the pool of potential renters, especially if the majority of the population cannot afford the ZORI without assistance.
The takeaway for landlords is clear: diversifying their tenant base to include those with vouchers can be a strategic move to ensure occupancy rates and financial stability. While the market rate of $1,928 might seem attractive, the reality of the affordability gap suggests that participating in the voucher program could provide a competitive edge in attracting and retaining tenants in Traverse City, MI.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.