Location: Pepin County, WI | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
U.S. Census Bureau data (2024)
In ZIP code 54721, the economics of Section 8 housing can be broken down using specific figures. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment is set at $1270 per month for FY 2024. This rate is specifically tailored for this ZIP code, reflecting the unique cost dynamics of the area. In contrast, the local market rent, as reported by the Census ACS, is lower at $945 per month.
When a landlord participates in the Section 8 program, the voucher does not cover the entire rent. Instead, it reimburses the landlord for the difference between the tenant's contribution and the SAFMR. For a two-bedroom unit, the tenant is typically expected to pay 30% of their adjusted income towards rent. If we assume an average adjusted income for the area, this could mean a significant portion of the rent is covered by the voucher.
The SAFMR of $1270 represents the maximum amount that the housing authority will pay on behalf of the tenant. If the local market rent is $945, then the voucher would cover the entire rent, plus provide additional utility allowances. However, if the rent exceeds the local market rate but remains below the SAFMR, the voucher still covers the full rent, ensuring that landlords receive a stable payment up to the limit.
To illustrate, if a landlord charges $1270 for a two-bedroom unit, the housing authority will reimburse the landlord for the full amount, assuming the tenant's portion does not exceed the SAFMR. But if the landlord sets the rent at $1500, the housing authority will only pay up to $1270, leaving the landlord to collect the remaining $230 from the tenant directly, which is unlikely given the tenant's 30% income cap.
Landlords should also consider that utility allowances are included in the SAFMR calculation. These allowances vary based on the type of unit and the number of bedrooms. For a two-bedroom unit, the utility allowance might add another $100-$200 to the total reimbursement, depending on the specifics of the housing authority's policy.
In ZIP 54721, the typical reimbursement gap or surplus for a two-bedroom unit is a surplus, given that the local market rent is below the SAFMR. Landlords can expect to receive the full market rent plus any applicable utility allowances without having to worry about collecting additional funds from tenants, as long as the rent does not exceed the SAFMR of $1270.
Data Sources: FMR data from HUD (2027). 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.