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 | $2,120 |
| 1 Bedroom | $2,210 |
| 2 Bedrooms | $2,620 |
| 3 Bedrooms | $3,440 |
| 4 Bedrooms | $3,840 |
| 5 Bedrooms | $4,454 |
| 6 Bedrooms | $4,988 |
| 7 Bedrooms | $5,387 |
| 8 Bedrooms | $5,656 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,620 | $337,939 | 0.78% | D |
| 3BR | $3,440 | $484,217 | 0.71% | D |
| 4BR | $3,840 | $529,253 | 0.73% | D |
| 5BR | $4,454 | $590,456 | 0.75% | D |
U.S. Census Bureau data (2024)
The Section 8 analysis for ZIP code 80640, located in Commerce City, CO, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for FY 2024 is set at $2,570, while the Zillow Observed Rent Index (ZORI) stands at $2,364. This means that the FMR is $206 higher than the market rent, representing an increase of approximately 8.7%.
In this scenario, where the FMR exceeds the market rent, landlords can leverage Section 8 vouchers to ensure a steady and reliable income stream. Voucher tenants provide a guaranteed payment through the Housing Choice Voucher program, which covers the difference between the market rent and what the tenant can afford based on their income. Given that the median income in Commerce City is $117,373, many residents may find it challenging to secure housing without assistance, making them ideal candidates for the voucher program.
The higher FMR also suggests that landlords can potentially achieve better yields compared to the open-market rates. With a median home value of $506,077, landlords might be inclined to seek out properties that offer higher returns relative to the investment costs. Section 8 tenants provide a stable occupancy rate and consistent rental payments, which can be particularly attractive in a market where only 20.2% of residents are renters.
However, accepting Section 8 tenants comes with its own set of considerations. Landlords must adhere to HUD regulations and undergo regular inspections to maintain eligibility. Additionally, the process of renting to voucher holders involves working with local housing authorities, which can add administrative overhead. Despite these challenges, the financial security provided by the government-backed payments often outweighs the drawbacks, especially given the current economic conditions and the potential for vacancy in a low-renter population area.
In summary, the gap between the FMR and market rent in ZIP 80640 presents a unique opportunity for landlords to participate in a yield play while providing affordable housing options in Commerce City, CO. The higher FMR ensures that landlords receive a payment that is closer to the actual value of their property, even if the market rent is lower.
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.