Location: Lake County, MN | Metro: Duluth, MN-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 | $990 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,710 |
| 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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,090 | $195,205 | 0.56% | F |
| 2BR | $1,420 | $279,757 | 0.51% | F |
| 3BR | $1,710 | $343,839 | 0.5% | F |
| 4BR | $2,090 | $372,110 | 0.56% | F |
U.S. Census Bureau data (2024)
The ZIP code 55616, located in Two Harbors, Minnesota, represents a modest-sized market with a population of 7,250 residents. Within this community, 19.7% of the population are renters, indicating that it is not heavily dominated by rental properties but still has a significant portion of the populace relying on rented housing. The median household income stands at $76,127, which provides a benchmark for understanding the economic context of potential tenants.
The typical market rent in this area is $1,096 per month, which equates to approximately 14.4% of the median household income. This percentage suggests that while rent is a considerable expense, it remains manageable for the average resident. Notably, the Fair Market Rent (FMR) for the area is set at $1,140 for fiscal year 2024, slightly higher than the current market rent, which could indicate a trend towards increasing rental costs.
The demand for Section 8 vouchers in ZIP 55616 appears to be moderate given the percentage of renters and the income levels. However, the relatively low percentage of renters compared to homeowners means that landlords might not encounter an overwhelming number of voucher holders seeking accommodation. Instead, landlords should anticipate a mix of tenants, including those who may rely on subsidies to meet their housing needs.
In conclusion, landlords in Two Harbors should prepare for a tenant pool that includes individuals with various financial backgrounds, some of whom may require assistance through housing vouchers. While the presence of voucher holders is expected, it will not be the predominant characteristic of the rental market. Tenants will likely have a strong connection to the local economy, with rents consuming a significant yet reasonable portion of their income.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.