Location: Sioux City, IA | Metro: Sioux City, IA-NE-SD MSA
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 | $830 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $231,278 | 0.51% | F |
| 3BR | $1,440 | $265,047 | 0.54% | F |
U.S. Census Bureau data (2024)
ZIP code 68731, located in Dakota City, NE, falls within the Sioux City, IA-NE-SD Metropolitan Statistical Area (MSA). When analyzing the Federal Market Rent (FMR) and market conditions, it's evident that 68731 presents itself as a value pocket within its broader metro area. The FMR for 68731 stands at $1020 for fiscal year 2024, which is notably higher than the market rent of $667. This discrepancy indicates a potential opportunity for landlords who can leverage the lower actual rents while benefiting from the higher FMRs associated with Section 8 housing assistance.
The median home value in 68731 is $251,011, which is likely below the average for the entire Sioux City MSA. This suggests that property acquisition costs could be lower compared to other parts of the metro, making it an attractive option for investors looking to purchase properties at a discount. Additionally, the 15.0% renter share is indicative of a moderate rental market, neither overwhelmingly dominated by renters nor predominantly owner-occupied.
A key indicator of a Section 8 sweet spot is a high renter share coupled with below-average home values. While 68731 has a moderate renter share, the below-average home values still make it a favorable location for Section 8 landlords. The combination of lower market rents and higher FMRs means that landlords in 68731 can potentially receive a greater subsidy relative to their expenses, thus increasing their net income.
In conclusion, ZIP 68731 represents a value pocket within the Sioux City, IA-NE-SD MSA, offering landlords and small-portfolio investors a chance to secure properties at relatively low costs while enjoying the benefits of higher FMRs. This makes it a strategic choice for those interested in Section 8 investments, given the specific figures provided.
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.