Location: Minneapolis-St. Paul-Bloomington, MN | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,490 |
| 1 Bedroom | $1,680 |
| 2 Bedrooms | $2,040 |
| 3 Bedrooms | $2,660 |
| 4 Bedrooms | $2,990 |
| 5 Bedrooms | $3,468 |
| 6 Bedrooms | $3,884 |
| 7 Bedrooms | $4,195 |
| 8 Bedrooms | $4,405 |
U.S. Census Bureau data (2024)
The median income in ZIP code 55402 stands at $62,105. The market rate for rent, known as the ZORI (Zillow Observed Rent Index), is set at $1,704. This means that the average household in this area spends approximately 32.5% of their annual income on rent alone. To calculate this, we take the annual rent cost ($1,704 multiplied by 12 months) and divide it by the median income ($62,105).
When comparing the ZORI to the Fair Market Rent (FMR) standard of $2,150 for the fiscal year 2024, it becomes evident that the FMR is significantly higher than the market rate. This suggests that the government's voucher payment standard exceeds what most households are currently paying for rent.
In ZIP code 55402, with a total population of 667 and all residents being renters, the affordability gap between the median income and the market rate is substantial. This gap has direct implications for landlord competition. Landlords who accept Section 8 vouchers receive the higher FMR payment, which can be a more attractive option than relying solely on the market rate. However, the decision to accept vouchers should also consider other factors such as the administrative burden and the potential for longer approval processes.
For landlords evaluating whether to accept voucher tenants or focus on cash-paying tenants, the data points to a strategic opportunity in voucher acceptance. Given that the FMR is $2,150, which is above the current market rate of $1,704, accepting vouchers could provide a steady and higher rental income. Moreover, the high percentage of renters in the area indicates a strong demand for affordable housing, making voucher tenants a reliable source of income.
The takeaway for landlords is clear: accepting Section 8 vouchers can be financially advantageous due to the higher payment standard compared to the local market rate. This strategy not only helps fill units but also aligns with the financial capabilities of the majority of the zip code’s residents.
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.