Location: Des Moines-West Des Moines, IA | Metro: Des Moines-West Des Moines, IA 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 | $1,170 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,970 |
| 4 Bedrooms | $2,010 |
| 5 Bedrooms | $2,332 |
| 6 Bedrooms | $2,612 |
| 7 Bedrooms | $2,821 |
| 8 Bedrooms | $2,962 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $247,697 | 0.58% | F |
| 3BR | $1,970 | $305,340 | 0.65% | D |
| 4BR | $2,010 | $381,705 | 0.53% | F |
| 5BR | $2,332 | $470,445 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 50327, which encompasses Pleasant Hill, IA, is built upon the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1140, while the market rent, measured by Zillow's ZORI, is $1246. This represents a gap of $106, or approximately 9.3%, between what the government deems fair and the prevailing rental prices.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors must be aware of the financial implications of housing voucher tenants. The cost of accepting Section 8 tenants includes maintaining properties to meet Housing Quality Standards (HQS), dealing with the administrative burden of renewing leases, and sometimes facing delays in receiving rent payments. However, the most significant impact is the reduction in rental income compared to the open market rate.
In the context of Pleasant Hill, where 19.0% of residents are renters and the median home value is $314,306, the median household income of $98,333 suggests that many potential tenants might rely on Section 8 vouchers. Accepting these vouchers means landlords will have to charge less than the market rate, effectively reducing their yield by $106 per unit per month, or 9.3% of the market rent. This gap can significantly affect an investor's cash flow and overall return on investment.
To illustrate, if a landlord has five units in this ZIP code, the total monthly loss due to the FMR being below the market rent would amount to $530. Over the course of a year, this translates to $6,360 in lost income, assuming all units are occupied by voucher holders. Therefore, while the program ensures steady tenancy, it also imposes a clear financial trade-off for landlords and investors.
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.