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 | $860 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,550 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $950 | $146,104 | 0.65% | D |
| 2BR | $1,120 | $195,115 | 0.57% | F |
| 3BR | $1,550 | $233,756 | 0.66% | D |
| 4BR | $1,870 | $267,523 | 0.7% | D |
| 5BR | $2,169 | $314,981 | 0.69% | D |
U.S. Census Bureau data (2024)
The rent math in ZIP 57104, located within the Sioux Falls, SD HUD Metro FMR area, does not favor Section 8 tenants. The Family Monthly Rent (FMR) for the zip code in fiscal year 2024 is set at $920, which falls significantly below the market rent, measured at $1,099 (ZORI). This gap indicates that landlords may face a shortfall if they rely solely on Section 8 rental subsidies.
Acquisition of properties in this area remains relatively affordable, with a median home value of $220,871. However, the lack of data regarding the number of days on market (DOM) and the percentage of homes that have had their prices cut suggests a stable market with little fluctuation. This stability can be interpreted as a sign of a robust local economy where housing values do not frequently drop, but it also implies that finding deals might be challenging.
Tenant demand in ZIP 57104 is substantial, given the 26,963 population and a 54.8% renter share. This high proportion of renters signals a strong market for landlords willing to accept Section 8 tenants. However, the attractiveness of these tenants must be weighed against the lower subsidy rates compared to market rents.
In summary, while there is significant tenant demand in ZIP 57104, the disparity between the Section 8 subsidy rate and the market rent makes it unprofitable for landlords to exclusively cater to Section 8 tenants. Despite the affordable property prices, the financial viability of accepting Section 8 tenants is compromised due to the subsidy falling short of covering market rates. Landlords should consider diversifying their tenant pool to include both market-rate and subsidized tenants to ensure a balanced and profitable investment strategy.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.