Location: Tucson, AZ | Metro: Tucson, AZ MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,040 |
| 1 Bedroom | $1,170 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,990 |
| 4 Bedrooms | $2,290 |
| 5 Bedrooms | $2,656 |
| 6 Bedrooms | $2,975 |
| 7 Bedrooms | $3,213 |
| 8 Bedrooms | $3,374 |
The analysis of the Section 8 program in ZIP code 85619 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 85619 in fiscal year 2024 is set at $1480. However, the market rent data is currently unavailable, which poses a challenge in providing a precise percentage comparison. Despite this limitation, the implications of the FMR can still be assessed.
When the FMR exceeds the market rent, it signals an opportunity for landlords and small-portfolio investors. In such cases, voucher tenants become a yield play. This means that landlords can potentially receive higher rental income than what the open market offers, due to the government subsidy covering the difference between the actual market rate and the FMR. For instance, if the market rent is below $1480, accepting Section 8 tenants could ensure a landlord receives the full $1480, increasing their rental yield.
Conversely, if the FMR is lower than the market rent, which appears to be the case here given the unavailability of market rent data, it indicates a cost to landlords. Housing voucher tenants below open-market rates means landlords must accept a lower rent than they might otherwise command in the free market. This can be seen as a trade-off; while landlords may lose out on potential higher rents, they gain the stability of guaranteed payments through the voucher system, reducing the risk of vacancy and unpaid rent.
The broader context of ZIP 85619 is also important. With a median home value of $537,175, it suggests a relatively affluent area. However, the percentage of renters and median income data is missing, which would provide further insight into the local housing dynamics and the financial profile of potential tenants. Nonetheless, the high median home value implies that owning a property in this area is likely costly, making rental properties a crucial component of the housing market.
In conclusion, the Section 8 program in ZIP 85619 presents a scenario where landlords must decide whether the stability of government-backed rents outweighs the potential for higher yields in a free market setting. The exact financial impact remains unclear without specific market rent data, but the principle stands that the FMR sets a benchmark below which landlords must operate when accepting voucher tenants.
Data Sources: FMR data from HUD (2027).
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.