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 | $1,600 |
| 1 Bedroom | $1,710 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,620 |
| 4 Bedrooms | $2,910 |
| 5 Bedrooms | $3,376 |
| 6 Bedrooms | $3,781 |
| 7 Bedrooms | $4,083 |
| 8 Bedrooms | $4,287 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,990 | $296,465 | 0.67% | D |
| 3BR | $2,620 | $597,806 | 0.44% | F |
| 4BR | $2,910 | $694,742 | 0.42% | F |
| 5BR | $3,376 | $815,634 | 0.41% | F |
U.S. Census Bureau data (2024)
The ZIP code 85257, located in Scottsdale, Arizona, presents an interesting scenario for both renters and landlords. The median income for households in this area is $86,962, which provides a baseline for assessing rental affordability. The market rate for rentals, known as the Zillow Observed Rent Index (ZORI), stands at $1,943 per month. This figure represents the typical rent one might expect to pay in the area.
In comparison, the Fair Market Rent (FMR) for the fiscal year 2024, which is used as a standard for voucher payments, is set at $1,860. This means that a household receiving a housing voucher would have their rent subsidized up to this amount, leaving any excess to be paid by the tenant.
The affordability gap becomes apparent when comparing the median income to these rental rates. A household earning the median income of $86,962 would find it challenging to afford the market rate of $1,943 without significant financial strain. At 22% of the median annual income, this market rate exceeds the recommended 30% threshold for housing affordability.
With 38.9% of the 29,812 population being renters, there is a substantial demand for affordable housing. This demographic suggests a competitive environment for landlords, as they must consider both the number of potential tenants and their ability to pay market rates.
Landlords should take note of the discrepancy between the market rate and the FMR. While renting at the market rate of $1,943 could attract cash-paying tenants, it also risks excluding those who rely on housing vouchers. Accepting voucher tenants at the subsidized rate of $1,860 ensures a steady, government-backed income stream but may require adjustments in property management practices.
The takeaway for landlords is clear: understanding the local rental dynamics and the financial capabilities of potential tenants is crucial. By considering the mix of cash-paying and voucher-supported tenants, landlords can optimize their portfolio for stability and profitability. Given the high market rate and the significant portion of renters, accommodating voucher tenants can provide a competitive edge in securing long-term occupancy.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.