Location: Sioux Falls, SD | Metro: Sioux Falls, SD HUD Metro FMR Area
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 | $1,200 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,570 |
| 3 Bedrooms | $2,170 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,570 | $297,631 | 0.53% | F |
| 3BR | $2,170 | $344,812 | 0.63% | D |
| 4BR | $2,620 | $377,853 | 0.69% | D |
| 5BR | $3,039 | $584,474 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 57032, which includes Harrisburg, SD, presents a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1210, while the market rent, measured by the Zillow Observed Rent Index (ZORI), stands at $1494. This means there is a $284 discrepancy, representing a 23.5% difference between what the government deems fair and the open-market rate.
In this scenario where the FMR is lower than the market rent, landlords face the challenge of accepting housing vouchers that pay below the open-market rates. The cost of housing voucher tenants can be seen in the reduced rental income compared to non-voucher tenants who might pay the full market rent. However, this gap also creates an opportunity for landlords to stabilize their cash flow with guaranteed payments from the Housing Choice Voucher program, despite receiving less than the market rate.
Harrisburg, SD has a rental market where 18.7% of residents are renters. The median home value in the area is $361,294, indicating a relatively stable housing market. Meanwhile, the median household income is $111,528, which suggests that many residents have the financial capacity to afford market-rate rents. Given these economic conditions, the decision to accept Section 8 tenants should be carefully weighed against the potential for higher yields from market-rate rentals.
To illustrate the impact, consider the following:
In conclusion, the $284 difference between the FMR and ZORI represents a 23.5% reduction in potential rental income for landlords in Harrisburg, SD. This gap underscores the trade-offs involved in participating in the Section 8 program, especially in a market where many residents can afford to pay higher rents. Landlords should evaluate their investment goals and the broader economic context when deciding whether to accept housing vouchers.
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.