Location: Walworth County, WI | Metro: Racine-Mount Pleasant, WI 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 | $1,170 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,770 |
| 5 Bedrooms | $3,213 |
| 6 Bedrooms | $3,599 |
| 7 Bedrooms | $3,887 |
| 8 Bedrooms | $4,081 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,680 | $315,019 | 0.53% | F |
| 3BR | $2,100 | $438,919 | 0.48% | F |
| 4BR | $2,770 | $515,448 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 program's financial dynamics in ZIP code 53120, located in East Troy, WI, reveal a critical gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1380, while the Census ACS data indicates a market rent of $1479. This discrepancy amounts to a $99 difference, representing approximately 7.2% of the market rent.
In East Troy, where the median home value is $461,505 and the median income is $96,345, landlords must carefully consider the implications of renting to voucher holders. The 23.9% rental rate in the area suggests a competitive market for both Section 8 and non-voucher tenants.
Given that the FMR is lower than the market rent, landlords who accept Section 8 vouchers are essentially accepting a reduction in their potential rental income. The cost of housing voucher tenants below open-market rates can be seen as an opportunity cost, as landlords might miss out on higher rents that could be charged to non-voucher tenants.
However, there are strategic advantages to participating in the Section 8 program. The stability of government-backed payments reduces the risk of vacancy and ensures consistent cash flow. In East Troy, this can be particularly beneficial given the local economic conditions and the desire for steady returns among small-portfolio investors.
To illustrate the financial impact, consider a landlord with a property that could command a market rent of $1479. By accepting a Section 8 voucher tenant paying $1380, the landlord incurs a direct loss of $99 per month. Over a year, this translates to a loss of $1188, which can affect overall yields.
Despite these costs, the Section 8 program offers a reliable source of income, especially in areas with high competition for rentals. Landlords should weigh the benefits of guaranteed tenancy against the slightly reduced monthly rent when deciding whether to participate in the program.
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.