Location: Racine-Mount Pleasant, WI | Metro: Kenosha, 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 | $980 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,990 |
| 5 Bedrooms | $2,308 |
| 6 Bedrooms | $2,585 |
| 7 Bedrooms | $2,792 |
| 8 Bedrooms | $2,932 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,290 | $205,594 | 0.63% | D |
| 3BR | $1,710 | $242,534 | 0.71% | D |
| 4BR | $1,990 | $287,586 | 0.69% | D |
| 5BR | $2,308 | $246,817 | 0.94% | C |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 53403, located in Racine, WI, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1,090, while the Zillow Rent Index (ZORI) indicates that the market rent is $1,057. This means that the FMR is $33 higher than the market rent, representing a 3.1% premium.
The gap between the FMR and market rent suggests that voucher tenants can provide a yield advantage for landlords and small-portfolio investors. The Section 8 program guarantees payment up to the FMR, which in this case is above the typical market rate. This premium effectively reduces vacancy risk and ensures steady cash flow, making it a strategic investment play in a market where 41.6% of residents are renters.
Racine's median home value is $208,231, and the median income is $59,820, indicating a rental market that is sensitive to affordability issues. The FMR being set above the market rate helps address these concerns, ensuring that low-income families can access housing without placing an undue financial burden on landlords.
However, landlords must also consider the administrative overhead associated with managing Section 8 properties. Despite the slightly higher guaranteed rent, the overall cost of housing voucher tenants can include additional paperwork, inspections, and compliance requirements. These factors should be weighed against the benefits of a stable tenant base willing to pay a rate slightly above the current market average.
In summary, the $33 premium or 3.1% above the market rent in ZIP 53403 makes Section 8 properties a potentially attractive investment option for landlords and small-portfolio investors in Racine, WI. It offers a balance between financial stability and social responsibility, catering to a significant portion of the local population that relies on rental housing.
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.