Location: Duluth, MN | Metro: Duluth, MN-WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
U.S. Census Bureau data (2024)
The analysis for the Section 8 program in ZIP code 55757 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for 2024 is set at $1030, while the Census ACS data indicates that the market rent in the area is $833. This means there is a $197 difference, which translates to a 23.6% premium for landlords who participate in the Section 8 program.
In this context, where only 13.2% of residents are renters, the Section 8 program can be seen as a yield play for landlords. The higher FMR compared to the market rent allows landlords to charge more than what the typical rental market would bear, thereby increasing their potential earnings. This premium is particularly attractive given the median home value of $238,679 and the median income of $61,538, which suggests that the local economy can support higher rents without placing an undue burden on voucher holders.
The decision to house voucher tenants below open-market rates should also be considered carefully. While the FMR provides a guaranteed income level, landlords must weigh this against the potential administrative costs and maintenance issues that can arise with subsidized housing. However, the 23.6% premium offered by the Section 8 program makes it a compelling option for maximizing returns on investment properties in ZIP 55757.
Small-portfolio investors should take note of these figures when evaluating the potential of properties in this area. With the FMR well above the market rent, the program offers a clear opportunity to increase rental income without significantly raising operational costs. This can be a key factor in improving the overall yield of rental investments in ZIP 55757.
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.