Location: Denver-Aurora-Centennial, CO | Metro: Denver-Aurora-Centennial, CO 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 | $1,910 |
| 1 Bedroom | $1,990 |
| 2 Bedrooms | $2,360 |
| 3 Bedrooms | $3,100 |
| 4 Bedrooms | $3,460 |
| 5 Bedrooms | $4,014 |
| 6 Bedrooms | $4,496 |
| 7 Bedrooms | $4,856 |
| 8 Bedrooms | $5,099 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,990 | $358,778 | 0.55% | F |
| 2BR | $2,360 | $489,602 | 0.48% | F |
| 3BR | $3,100 | $636,342 | 0.49% | F |
| 4BR | $3,460 | $761,985 | 0.45% | F |
| 5BR | $4,014 | $958,685 | 0.42% | F |
U.S. Census Bureau data (2024)
The ZIP code 80205 in Denver, CO, presents a unique landscape for both renters and landlords. The median household income stands at $104,836, which provides insight into the financial capabilities of residents. However, the market rate for rent, measured by ZORI (Zillow Observed Rent Index), is $1,953 per month. This figure represents a significant portion of the average household's monthly income, making it challenging for many renters to afford market-rate housing without assistance.
To contextualize further, the Fair Market Rent (FMR) for the area, set at $2,140 for zip FY 2024, is slightly higher than the ZORI. This suggests that the rental market is competitive and that landlords might face challenges in attracting tenants willing to pay the higher FMR rates without vouchers. Given that 62.7% of the population are renters, and the total population is 34,571, there is a substantial demand for rental properties. However, the affordability gap between the median income and the FMR highlights a potential struggle for many households to find suitable housing.
The disparity between the median income and the rental rates indicates that a significant number of renters may rely on government assistance such as Section 8 vouchers. Landlords must consider the dynamics of voucher payments versus cash-paying tenants. While voucher payments are guaranteed and typically cover the full FMR, they come with additional administrative requirements and oversight. Cash-paying tenants offer flexibility but may be fewer due to the high cost of living.
The takeaway for landlords is that understanding the local economic context is crucial for strategic decision-making. In ZIP 80205, where the median income is relatively high but still below the FMR, focusing on Section 8 tenants could ensure steady income and reduced vacancy rates. However, landlords should also be prepared to navigate the complexities associated with voucher programs. Alternatively, targeting cash-paying tenants who can afford the higher rents may yield higher returns but requires a robust marketing strategy to attract these renters amidst stiff competition.
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.