Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX 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 | $1,060 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,740 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,090 | $74,158 | 1.47% | A |
| 2BR | $1,290 | $150,440 | 0.86% | C |
| 3BR | $1,740 | $252,928 | 0.69% | D |
| 4BR | $2,160 | $329,678 | 0.66% | D |
| 5BR | $2,506 | $393,652 | 0.64% | D |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 77504, located in Pasadena, Texas, within Harris County, revolve around the Subsidized Area Fair Market Rent (SAFMR) and the local market rent rates. For a two-bedroom apartment in this specific ZIP code, the SAFMR for FY 2024 is set at $1200. This figure represents the maximum amount that a Section 8 Housing Choice Voucher will cover for rent in this area.
The local market rent, as measured by the Zillow Observed Rent Index (ZORI), is $1201 for a two-bedroom unit. This indicates that the SAFMR closely aligns with the actual rental market in ZIP 77504, suggesting minimal surplus or deficit for landlords accepting vouchers.
When a landlord agrees to lease a property under the Section 8 program, the voucher pays the difference between the tenant's portion of the rent and the total rent. The tenant is typically required to pay 30% of their adjusted income towards rent. If we assume an average adjusted income of $1600 for a qualified tenant, they would contribute $480 towards the rent. Therefore, the voucher would cover the remaining $720 of the $1200 rent, ensuring the landlord receives the full SAFMR rate.
In addition to the base rent, Section 8 vouchers also provide utility allowances. These allowances vary but generally cover a significant portion of the tenant's electricity, gas, water, and sewer costs. For instance, if the utility allowance is $100, the total monthly reimbursement to the landlord could be $1300 ($1200 for rent and $100 for utilities).
However, it's important to note that the SAFMR of $1200 is the ceiling for subsidy payments. If the market rent exceeds this amount, the landlord must either lower the rent to match the SAFMR or accept the reimbursement gap. In ZIP 77504, since the local market rent is just above the SAFMR, landlords might face a slight reimbursement gap of $1 per month for a two-bedroom unit. Conversely, if the market rent is below the SAFMR, landlords would receive a surplus.
To summarize, in ZIP 77504, the SAFMR for a two-bedroom apartment is $1200, which is very close to the local market rent of $1201. Landlords can expect to receive the full SAFMR plus any applicable utility allowances, leading to a minor reimbursement gap of $1 for this specific ZIP code.
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.