Location: Duluth, 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 | $770 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,530 | $257,685 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 analysis for ZIP code 55738 centers around the Fair Market Rent (FMR) figure of $980, which is set for fiscal year 2024. The absence of current market rent data for this area means we must rely solely on the FMR to guide our assessment.
In ZIP 55738, where only 2.9% of residents are renters, the median home value stands at $191,803 and the median income is $82,969. Given that the FMR is the benchmark for rental subsidies, it's critical to understand how this compares to the broader economic context of the region.
The lack of direct market rent data makes it impossible to calculate the exact gap between the FMR and the actual rents charged in the open market. However, we can infer that with such a low percentage of renters and a relatively high median income, market rents could be significantly higher than the FMR. This would mean that landlords accepting Section 8 vouchers would be renting their properties below the open-market rate, potentially leading to lower yields compared to what they might earn if renting to non-voucher tenants.
Landlords and small-portfolio investors should consider the implications of this subsidy structure. While the FMR provides a stable and predictable income source, it also represents a ceiling on rental income that may be well below what the local market could bear. This dynamic makes the ZIP 55738 an interesting case study in balancing the social benefits of affordable housing with the financial realities faced by property owners.
Given the high median home value and income levels, there is likely a strong demand for rental properties that could command much higher rents. Therefore, the decision to accept Section 8 vouchers should be weighed against the potential for higher returns from open-market rentals. The choice to participate in the Section 8 program in ZIP 55738 is thus a strategic one, influenced by both the local housing dynamics and the broader economic landscape.
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.