Location: Blanco County, TX | Metro: Austin-Round Rock-San Marcos, TX 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 | $1,500 |
| 1 Bedroom | $1,590 |
| 2 Bedrooms | $1,890 |
| 3 Bedrooms | $2,390 |
| 4 Bedrooms | $2,800 |
| 5 Bedrooms | $3,248 |
| 6 Bedrooms | $3,638 |
| 7 Bedrooms | $3,929 |
| 8 Bedrooms | $4,125 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,890 | $456,925 | 0.41% | F |
| 3BR | $2,390 | $502,642 | 0.48% | F |
| 4BR | $2,800 | $739,644 | 0.38% | F |
| 5BR | $3,248 | $928,264 | 0.35% | F |
U.S. Census Bureau data (2024)
The Section 8 housing analysis for ZIP code 78620, located in Dripping Springs, TX, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area in fiscal year 2024 is set at $1810, while the market rent, measured by the Zillow Rent Index (ZORI), stands at $2210. This means that landlords can expect a difference of $400 per month between the two figures. To put this into perspective, the gap represents approximately 22% of the market rent.
In Dripping Springs, TX, where only 14.1% of residents are renters, and the median home value is $677,127, the rental market is relatively small compared to homeownership. However, the median household income in the area is $153,477, which suggests that while homeownership is prevalent, there is still a segment of the population that relies on affordable housing options such as Section 8 vouchers.
Given that the FMR is lower than the market rent, landlords who accept Section 8 tenants are effectively renting their properties below the open-market rate. This discrepancy creates a scenario where landlords might see reduced monthly rental income compared to what they could earn from non-voucher tenants. For example, if a landlord charges $2210 as the market rent but accepts a Section 8 tenant paying $1810, they are leaving $400 per unit uncollected each month.
This situation presents both challenges and opportunities. Landlords must consider the potential for higher vacancy rates due to the limited number of voucher holders relative to the overall rental population. On the other hand, the reliability of federal funding backing Section 8 vouchers ensures consistent income, which can be particularly attractive in a market with high median home values and incomes that may not reflect the needs of all residents.
To summarize, the gap between the FMR and market rent in ZIP 78620 is $400, or about 22% of the market rent. This makes accepting Section 8 tenants a strategic decision for landlords, balancing the benefits of guaranteed income against the costs of renting below market rates.
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.