Location: Salt Lake City, UT | Metro: Salt Lake City, UT HUD Metro FMR Area
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 | $1,380 |
| 1 Bedroom | $1,550 |
| 2 Bedrooms | $1,850 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,790 |
| 5 Bedrooms | $3,236 |
| 6 Bedrooms | $3,624 |
| 7 Bedrooms | $3,914 |
| 8 Bedrooms | $4,110 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,550 | $623,084 | 0.25% | F |
| 2BR | $1,850 | $450,791 | 0.41% | F |
| 3BR | $2,450 | $654,354 | 0.37% | F |
| 4BR | $2,790 | $742,721 | 0.38% | F |
| 5BR | $3,236 | $953,893 | 0.34% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 84121, which encompasses Cottonwood Heights, UT, reveals a critical gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1820, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1858. This results in a $38 gap, representing a 2.1% difference between the two figures.
In the context of Cottonwood Heights, where 25.1% of residents are renters, the disparity between FMR and market rent poses a challenge for landlords. The median home value in the area is $742,731, and the median household income stands at $115,515. These economic indicators suggest that the local real estate market is relatively robust, with a strong demand for rental properties. However, when the FMR is lower than the market rent, as it is here, landlords face a decision: either accept a slightly reduced rent through the Section 8 program or seek higher rents from open-market tenants.
The cost of housing voucher tenants below open-market rates can be significant. Landlords must weigh the benefits of guaranteed payments from the government against the potential loss of revenue. In ZIP 84121, accepting a tenant with a Section 8 voucher means renting your property for $1820 instead of the market rate of $1858. Over a year, this gap amounts to $456 per unit, which can impact overall portfolio yields.
While the gap is relatively small, it still requires careful consideration for landlords and small-portfolio investors. The decision to participate in the Section 8 program should be based on a thorough understanding of the local rental market dynamics and the financial implications of this modest discrepancy. Given the high median home values and incomes in Cottonwood Heights, the allure of slightly higher market rents might outweigh the security of government-backed payments for some landlords.
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.