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 | $1,170 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,560 |
| 5 Bedrooms | $2,970 |
| 6 Bedrooms | $3,326 |
| 7 Bedrooms | $3,592 |
| 8 Bedrooms | $3,772 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $320,680 | 0.48% | F |
| 3BR | $2,110 | $359,906 | 0.59% | F |
| 4BR | $2,560 | $395,082 | 0.65% | D |
| 5BR | $2,970 | $543,611 | 0.55% | F |
U.S. Census Bureau data (2024)
The median income in ZIP code 57064, which includes Tea, South Dakota, stands at $119,022. This figure suggests that households have a reasonable financial cushion, but when it comes to affording the market rate rent of $1,405 per month (ZORI), the situation becomes less favorable. The gap between the median income and the market rent indicates that many residents might find it challenging to meet the ZORI without financial strain.
In contrast, the Housing Choice Voucher Program offers a more affordable option for renters, with the Fair Market Rent (FMR) set at $1,180 for the fiscal year 2024. This means that voucher holders can secure housing at a significantly lower cost compared to the market rate, making it easier for them to manage their monthly expenses.
The takeaway for landlords considering whether to accept vouchers or focus on cash-paying tenants is clear. While cash-paying tenants might offer higher rents, the limited number of such households could make competition fierce and vacancy rates a concern. On the other hand, accepting vouchers ensures a steady stream of tenants willing to pay the FMR, albeit at a lower rate. Landlords should weigh these factors carefully, considering the balance between immediate rental income and long-term occupancy stability.
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.