Location: San Miguel County, CO | Metro: Ouray 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 | $1,250 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,330 |
| 4 Bedrooms | $2,610 |
| 5 Bedrooms | $3,028 |
| 6 Bedrooms | $3,391 |
| 7 Bedrooms | $3,662 |
| 8 Bedrooms | $3,845 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,540 | $512,996 | 0.3% | F |
| 2BR | $1,680 | $674,960 | 0.25% | F |
| 3BR | $2,330 | $907,727 | 0.26% | F |
| 4BR | $2,610 | $1,225,498 | 0.21% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 81432, centered around Ridgway, CO, is based on the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area for fiscal year 2026 is set at $1,610, while the Census ACS data indicates that the market rent stands at $1,744. This creates a gap of $134, or approximately 8.3%, between what voucher tenants can be expected to pay and the prevailing rental rates.
Given that the FMR is less than the market rent, landlords and small-portfolio investors must consider the financial implications of accepting housing vouchers. By leasing properties to voucher tenants at the FMR rate of $1,610, they will be receiving rent that is below the open-market rate of $1,744. This means a direct loss of $134 per unit, per month, compared to renting to non-voucher tenants.
In the context of Ridgway, CO, where only 14.8% of residents are renters, the competition for rental units is relatively low. However, the median home value of $871,212 and median income of $90,882 suggest that owning a home is more common and financially feasible for many residents. This further underscores the importance of rental properties, especially those participating in the Section 8 program, which serves lower-income families.
To mitigate the financial impact of this gap, investors might focus on minimizing operating costs and maximizing occupancy rates. Additionally, the stability and predictability of government-backed payments can be seen as an advantage over the variability often associated with private-market rentals. Despite the lower rental income, the reliability of payments can make this a viable strategy for generating consistent cash flow.
Investors should also consider the broader economic benefits of providing affordable housing. In a community with a high median home value and median income, ensuring that there is a sufficient supply of affordable rental units can help maintain a diverse socioeconomic mix and support local businesses and services that cater to a wider range of income levels.
In summary, the Section 8 program in ZIP 81432 offers a clear but nuanced opportunity for landlords and small-portfolio investors. While the $134 gap represents a tangible cost when compared to market rents, the benefits of stable tenancy and the role in supporting community diversity can offset these financial considerations.
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.