Section 8 Fair Market Rent (FMR) for ZIP 70816 - 2027

Investment Score for ZIP 70816

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$980
1 Bedroom	$1,010
2 Bedrooms	$1,140
3 Bedrooms	$1,440
4 Bedrooms	$1,830
5 Bedrooms	$2,123
6 Bedrooms	$2,378
7 Bedrooms	$2,568
8 Bedrooms	$2,696

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,140	$135,171	0.84%	C
3BR	$1,440	$227,745	0.63%	D
4BR	$1,830	$321,185	0.57%	F
5BR	$2,123	$433,584	0.49%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 70816 (Baton Rouge, LA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 70816 is set by HUD for 2026 as follows: - 0BR: $1050 - 1BR: $1080 - 2BR: $1220 (which represents 21.7% of the median household income) - 3BR: $1530 - 4BR: $1980 These figures represent the maximum rent that a Section 8 voucher holder can pay based on the size of the unit. However, the actual rental market in 70816 suggests that rents may be higher. For instance, the Zillow median price for a 2BR home is $138,263, which translates to a monthly mortgage payment of approximately $1,000 if financed over 30 years at a 4% interest rate. Given the Price-to-FMR ratio of 9.4x, it is likely that actual rents exceed the FMR significantly. This means that voucher holders face significant constraints in finding affordable housing, particularly in larger units where the FMR is lower relative to market rates. #### Affordability & Renter Profile ZIP code 70816 has a population of 45,718, with 50.1% of residents being renters. The occupancy rate stands at 86.6%, indicating a relatively tight rental market. With a median household income of $67,353, the affordability of housing is a critical issue for many residents. The FMR for a 2BR unit at $1220 is only 21.7% of the median income, suggesting that while it is affordable for some, others may struggle to meet the rent even with a voucher. The high proportion of renters and the tight occupancy rate indicate that there is a strong demand for rental properties in this area, but the supply may not be sufficient to meet the needs of all residents, especially those relying on Section 8 vouchers. #### Investor Angle From an investor's perspective, the ZIP code 70816 presents both opportunities and challenges. The FMRs provide a baseline for what voucher holders can afford, but the actual rents are likely much higher due to the tight market conditions and the high Price-to-FMR ratio. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical operating expenses and mortgage payments for rental properties. Assuming a 2BR property priced at $138,263 and financed over 30 years at a 4% interest rate, the monthly mortgage payment would be around $660. Adding typical operating expenses such as property taxes, insurance, maintenance, and utilities, the total monthly cost could range from $1,000 to $1,200. At the FMR of $1220, this would result in a very slim margin or potentially negative cash flow, depending on the exact expenses. Given the high Price-to-FMR ratio, it is clear that the market rents far exceed the FMR, making it difficult for voucher holders to find suitable housing. However, this also means that investors who can secure tenants paying market rates will likely have positive cash flows. The investment grade for this ZIP code would be moderate to low for Section 8-focused investors due to the limited number of units that fall within the FMR range and the potential difficulty in attracting voucher holders. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower, investors should consider focusing on developing or acquiring smaller units. For example, a 1BR unit with an FMR of $1080 might be easier to rent out to voucher holders compared to a 2BR unit. Additionally, smaller units often have lower acquisition costs and operating expenses, potentially leading to better cash flow. 2. **Consider Mixed-Income Developments**: Given the high market rents and the tight market, mixed-income developments could be a viable strategy. By including a mix of units that cater to both voucher holders and market-rate tenants, investors can balance their portfolio and ensure steady cash flow. For instance, a development could include a few 2BR units at FMR ($1220) and several 2BR units at market rates ($1380-$1500), providing a buffer against the financial constraints faced by voucher holders. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help streamline the process of securing Section 8 tenants. These authorities can provide valuable insights into the availability of vouchers and the specific needs of voucher holders in the area. Additionally, they can offer support in navigating the complex regulations associated with Section 8 properties. #### Bottom Line For Section 8-focused investors, the ZIP code 70816 presents a challenging environment due to the high market rents and the tight occupancy rate. The recommendation would be to **Skip** this ZIP code for pure Section 8 investments, given the limited number of units that fall within the FMR range and the potential difficulty in attracting voucher holders. Instead, investors might consider a **Hold** strategy with a focus on mixed-income developments, where a portion of units can be rented to voucher holders while others cater to market-rate tenants. This approach would mitigate the risks associated with relying solely on Section 8 vouchers and provide a more stable cash flow.

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.