Section 8 Fair Market Rent (FMR) for ZIP 85234 - 2027

Investment Score for ZIP 85234

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,680
1 Bedroom	$1,800
2 Bedrooms	$2,090
3 Bedrooms	$2,760
4 Bedrooms	$3,060
5 Bedrooms	$3,550
6 Bedrooms	$3,976
7 Bedrooms	$4,294
8 Bedrooms	$4,509

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,090	$315,300	0.66%	D
3BR	$2,760	$471,650	0.59%	F
4BR	$3,060	$597,144	0.51%	F
5BR	$3,550	$785,255	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85234 (Gilbert, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85234 in Gilbert, Arizona, is set by HUD for 2026. The FMRs for different bedroom types are as follows: - 0BR: $1800 - 1BR: $1950 - 2BR: $2270 (which is 22.5% of the median household income) - 3BR: $3030 - 4BR: $3360 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. For a 2BR unit, the Zillow median price is $325,333, which translates to an annual rent of approximately $32,533 based on typical rental yields. This equates to a monthly rent of around $2,711, significantly higher than the FMR of $2,270. The price-to-FMR ratio is 11.9x, indicating that actual rents are much higher than the FMR. This creates a significant constraint for voucher holders. They can only afford units up to the FMR, which means they would have difficulty finding 2BR units in this area since the average rent far exceeds the FMR. The gap between FMR and actual rents suggests that voucher holders might be limited to smaller units or face challenges in securing housing. #### Affordability & Renter Profile The population of ZIP code 85234 is 51,283, with 24.4% of residents being renters. Given the median household income of $121,102, it is clear that the area is relatively affluent. However, the high rent-to-income ratio for 2BR units indicates that even for those earning the median income, housing costs can be a significant burden. The occupancy rate of 96.1% suggests a tight market with little vacancy. This tightness likely contributes to the high rent prices relative to the FMR. It also implies that there is strong demand for rental properties, but the supply is constrained, leading to higher prices. Given the high median income and low percentage of renters, it is reasonable to infer that the typical renter in this area is likely to be a young professional or a family with moderate to high income levels. These individuals or families might find it challenging to secure affordable housing, especially if they rely on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 85234 presents both opportunities and challenges. The high median income and tight occupancy rate suggest a robust rental market. However, the high price-to-FMR ratio indicates that properties rented at FMR levels might struggle to compete with market rates. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental yields and expenses. Assuming a typical rental yield of 7%, the annual rent for a property priced at $325,333 would be approximately $22,773, or $1,900 per month. This is slightly above the FMR for a 2BR unit, suggesting that properties rented at FMR would likely generate lower returns compared to market rates. The investment grade for this ZIP code would be considered moderate due to the high competition from market-rate rentals and the potential difficulty in finding tenants who can only pay up to the FMR. Investors should carefully evaluate their ability to manage properties at FMR levels while competing with higher-priced market-rate rentals. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high rent-to-FMR ratio for larger units, investors should focus on developing or acquiring 0BR, 1BR, and potentially 2BR units. These units are more likely to be within the FMR range and thus more accessible to voucher holders. For example, a 1BR unit at $1,950 per month is well within the FMR limit and could attract tenants who cannot afford higher rents. 2. **Target Affordable Neighborhoods Within ZIP Code**: While the overall ZIP code has high rent prices, there might be pockets within the area where rents are closer to the FMR. Investors should conduct detailed neighborhood analyses to identify areas where rents are more affordable. This could involve looking at older developments or areas with less desirable amenities that still meet the needs of voucher holders. 3. **Consider Mixed-Income Developments**: To ensure steady occupancy and cash flow, investors might want to consider mixed-income developments. By offering a mix of units at FMR and market rates, they can cater to both voucher holders and higher-income tenants. This approach can help balance the financial risks associated with renting exclusively at FMR levels. #### Bottom Line For Section 8-focused investors, the ZIP code 85234 presents a challenging environment due to the high rent-to-FMR ratio and tight market conditions. The recommendation for this ZIP code is to **Skip** unless you can identify specific neighborhoods or unit types that are more affordable and better aligned with FMR levels. Investors should look for opportunities in other ZIP codes with more favorable FMR-to-market rent ratios to maximize their chances of success in the Section 8 market.

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.