Location: Montrose County, CO | Metro: Montrose County, CO
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 | $1,020 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,080 | $276,751 | 0.39% | F |
| 2BR | $1,350 | $332,360 | 0.41% | F |
| 3BR | $1,870 | $438,248 | 0.43% | F |
| 4BR | $2,260 | $500,823 | 0.45% | F |
| 5BR | $2,622 | $627,820 | 0.42% | F |
U.S. Census Bureau data (2024)
The median income in ZIP 81401, Montrose, CO, stands at $71,286. The market rate for rent, known as the Zillow Observed Rent Index (ZORI), is $1,716 per month. This means that the average household in Montrose spends approximately 29.6% of their gross income on rent, calculated by dividing the monthly rent ($1,716) by the annual median income ($71,286) and multiplying by 100.
In comparison, the Fair Market Rent (FMR) standard for the metro area for fiscal year 2026 is set at $1,180. This figure represents the maximum amount that a household participating in the Housing Choice Voucher program, commonly referred to as Section 8, would pay for rent. At this rate, a household would spend roughly 20.2% of their gross income on rent.
The population of Montrose is 24,228, with 28.5% of residents being renters. Given these numbers, there is a significant affordability gap between the market rate and the FMR standard. Landlords should be aware that this gap could lead to increased competition among those who are eligible for Section 8 vouchers, as they seek more affordable housing options.
The takeaway for landlords considering whether to accept vouchers or focus on cash-paying tenants is clear. While accepting a Section 8 voucher limits the rent to $1,180, it also ensures a steady stream of income from a government-backed program. On the other hand, relying on cash-paying tenants might allow for higher rental rates, but it exposes landlords to greater market volatility and the risk of vacancy in a region where many households find the market rate challenging to meet.
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.