Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ 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 | $1,120 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,900 |
| 4 Bedrooms | $2,130 |
| 5 Bedrooms | $2,471 |
| 6 Bedrooms | $2,768 |
| 7 Bedrooms | $2,989 |
| 8 Bedrooms | $3,138 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,900 | $170,962 | 1.11% | B |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 85137 revolves around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1730, while the Census American Community Survey (ACS) indicates that the market rent stands at $1,043. This creates a gap of $687 per month, or approximately 66%, between what voucher tenants can pay and the open-market rental rate.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors should view this area as a potential yield play. Voucher tenants provide a guaranteed income stream, backed by the federal government, which ensures that the rent will be paid even if the tenant falls behind. This stability is particularly valuable in a market where the majority of renters might struggle to meet higher rent demands due to the median income of $57,946. The lower market rent suggests that many local residents are already paying less than the FMR, making it an attractive opportunity for those willing to participate in the Section 8 program.
In ZIP 85137, only 17.0% of the population are renters, indicating a smaller pool of potential voucher tenants compared to areas with higher rental percentages. However, the median home value of $170,998 implies that homeownership is relatively affordable, but this also means that rental properties could be undervalued, offering a chance for above-average yields when considering the income guarantees from the Section 8 vouchers.
To summarize, the discrepancy between the FMR and market rent makes ZIP 85137 a compelling investment for those interested in leveraging the Section 8 program. Landlords can expect a steady, government-backed income source that exceeds the typical market rent by $687 per month, enhancing their overall portfolio performance. This analysis is anchored in the context of a relatively low rental percentage, moderate median income, and a mix of affordable homeownership and rental property values.
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.