Location: Sioux City, IA | Metro: Sioux City, IA-NE-SD 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 | $1,070 |
| 1 Bedroom | $1,240 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,090 |
| 5 Bedrooms | $2,424 |
| 6 Bedrooms | $2,715 |
| 7 Bedrooms | $2,932 |
| 8 Bedrooms | $3,079 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,870 | $347,564 | 0.54% | F |
| 4BR | $2,090 | $387,493 | 0.54% | F |
| 5BR | $2,424 | $455,067 | 0.53% | F |
U.S. Census Bureau data (2024)
The analysis for the Section 8 program in ZIP code 51054 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent based on Census ACS data. For fiscal year 2024, the FMR is set at $1270, while the market rent stands at $1156. This indicates that the FMR is higher than the market rent, creating a gap of $114 per month. In percentage terms, this gap represents an increase of approximately 10% over the market rent.
This situation makes ZIP 51054 a yield play for landlords who participate in the Section 8 program. The higher FMR means that voucher tenants can potentially pay more than what the average market rent suggests, thereby increasing the landlord's rental income above the typical rate. For example, a landlord could receive $1270 per month from the government for a unit that would otherwise rent for $1156, thus earning an extra $114 per month without having to charge the tenant directly.
However, it is important to consider the broader context of the ZIP code. With 24.7% of residents being renters, there is a notable portion of the population relying on rental housing. The median home value in the area is $353,775, indicating a relatively stable housing market. Additionally, the median household income of $119,716 suggests that residents have the financial capacity to afford higher rents, but the current market rent is lower than the FMR.
In conclusion, the higher FMR compared to the market rent in ZIP 51054 presents a unique opportunity for landlords to benefit financially from the Section 8 program. By renting to voucher tenants, they can achieve higher yields without the risk of overpricing their units in the local rental market. This is particularly advantageous given the demographic and economic conditions of the area, where a significant portion of residents are already renters and have the potential to contribute to a robust rental income scenario.
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.