Location: Duluth, MN | Metro: Duluth, MN-WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,050 |
| 1 Bedroom | $1,200 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $2,090 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
U.S. Census Bureau data (2024)
The median income in ZIP code 55702 stands at $78,125, indicating a relatively affluent area. However, when juxtaposed against the market rent rate of $1,550 (as reported by the Census ACS), the picture becomes more nuanced. A household earning the median income would dedicate approximately 19.8% of their gross income towards housing if they were paying the market rate. This percentage is calculated by dividing the annual rent ($18,600) by the median income ($78,125).
In contrast, the Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $1,090. This means that a household receiving a housing voucher would pay only 14.0% of their gross income towards rent, assuming the voucher covers the difference between the FMR and the household's portion. The calculation for this is based on the assumption that the household pays 30% of their adjusted income towards rent, which is a common practice for voucher programs.
With only 7.4% of the 412 residents being renters, the competition for rental properties is likely low. This translates into a smaller pool of potential tenants, making it crucial for landlords to consider both voucher and cash-paying strategies. The affordability gap between the market rate and the FMR highlights the financial strain many renters might face without assistance. Landlords who accept vouchers can tap into a segment of the market that might otherwise be unable to afford living in ZIP 55702.
However, landlords must weigh the benefits of accepting vouchers against the administrative complexities and potential delays in payment. For those focused on maximizing immediate cash flow, attracting cash-paying tenants who can afford the higher market rates might be more appealing. But for those looking to secure longer-term tenancy and support a broader range of residents, voucher acceptance could be a strategic advantage.
Takeaway: Landlords in ZIP 55702 should consider a balanced approach, catering to both cash-paying tenants and those with vouchers. While the area's median income suggests a capacity to bear higher rents, the significant difference between the market rate and the FMR indicates a substantial number of residents who would benefit from voucher assistance. By offering flexible payment options, landlords can mitigate the effects of a limited rental market and potentially increase occupancy rates.
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.