Location: Douglas County, MN | Metro: Douglas County, MN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,510 |
| 5 Bedrooms | $1,752 |
| 6 Bedrooms | $1,962 |
| 7 Bedrooms | $2,119 |
| 8 Bedrooms | $2,225 |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 56332 are straightforward. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) is set at $1,070 per month for the fiscal year 2026. This figure represents the maximum amount a landlord can charge for rent under the Section 8 program in this specific ZIP code.
In contrast, the local market rent for a similar two-bedroom unit averages $487 per month according to the latest Census ACS data. This difference highlights the potential benefits and challenges for landlords participating in the Section 8 program.
A voucher payment under Section 8 consists of two parts: the tenant's portion and the subsidy portion paid by the government. Typically, tenants are required to pay approximately 30% of their adjusted income toward rent. If we assume an average adjusted income of $1,500 for a Section 8 tenant, the tenant's contribution would be around $450 per month. The remaining balance is covered by the government, which calculates the subsidy based on the SAFMR minus the tenant's contribution and any applicable utility allowances.
Utility allowances vary but are generally modest. For simplicity, let's assume a utility allowance of $100 per month. Therefore, the total reimbursement a landlord might receive for a two-bedroom apartment would be the tenant's $450 contribution plus the government subsidy, which would be calculated as follows:
$1,070 (SAFMR) - $450 (tenant contribution) = $620 (government subsidy)
Adding the utility allowance:
$620 (government subsidy) + $100 (utility allowance) = $720 (total reimbursement)
This means the landlord would receive $720 per month from the government, plus the $450 from the tenant, totaling $1,170. However, the actual amount a landlord can charge cannot exceed the SAFMR of $1,070, so the total reimbursement would be capped at this amount.
To summarize, the typical reimbursement for a two-bedroom apartment in ZIP 56332 under the Section 8 program is $1,070 per month. Given the local market rent of $487, this represents a significant premium for landlords. However, the reimbursement does not cover the entire cost of the higher SAFMR rate, leaving a surplus for landlords who can manage within the local market rates.
The reimbursement gap or surplus, therefore, is $583 per month ($1,070 - $487), which is a substantial advantage for landlords willing to participate in the program and adhere to its guidelines.
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.