Location: Traverse County, MN | Metro: Grant County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP 56274 centers around the disparity between the Fair Market Rent (FMR) of $990 for the fiscal year 2026 and the median home value of $193,800. This ZIP code, located in Norcross, MN, has a median household income of $118,889, indicating a relatively affluent community. However, the FMR is significantly lower than the typical market rent, which is generally priced between $300-$499 per month including utilities, according to recent data.
The gap between the FMR and market rent is $591 per month, representing a 60% discount off the typical market rate. This makes ZIP 56274 an attractive location for voucher tenants, as it allows landlords to secure a steady stream of rental income at below-market rates. Given that only 1.9% of residents are renters, the demand for rental properties is limited. Thus, accepting Section 8 vouchers can be a strategic yield play for landlords, ensuring consistent occupancy and income in a market where rental demand is low.
In this context, the cost of housing voucher tenants below open-market rates is justified by the stability they bring to the rental market. While the discount is substantial, the guaranteed payment from the government ensures that landlords receive a predictable income without the risk of vacancy. This is particularly beneficial in ZIP 56274, where the rental market is less active compared to the broader real estate market.
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.