Location: Tucson, AZ | Metro: Tucson, 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 | $1,070 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,410 |
| 5 Bedrooms | $2,796 |
| 6 Bedrooms | $3,132 |
| 7 Bedrooms | $3,383 |
| 8 Bedrooms | $3,552 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $403,184 | 0.38% | F |
| 3BR | $2,120 | $544,696 | 0.39% | F |
U.S. Census Bureau data (2024)
Tucson, AZ, specifically ZIP code 85701, presents an intriguing opportunity for inclusion within a Section 8 portfolio strategy. This area can be best described as a cash-flow anchor. The rationale behind this classification lies in the nearly identical Fair Market Rent (FMR) and market rent values for a one-bedroom unit, both at $1410 for fiscal year 2024. The FMR is set by HUD to ensure that rental properties participating in the Section 8 program are priced reasonably.
The median home value in ZIP 85701 stands at $405,147, which is a significant figure when considering property investment. However, for a Section 8 portfolio, the focus is primarily on rental income rather than property value appreciation. The fact that the FMR aligns closely with the market rent suggests stability and predictability in rental income, making it a reliable component of a portfolio aimed at generating consistent cash flow.
The low price-cut share of 0.2% indicates that rental properties in this area rarely need to be discounted to attract tenants, further supporting the idea of stable cash flows. Additionally, the median income in the area is $51,794, which is sufficient to support a healthy demand for subsidized housing under the Section 8 program. With a renter share of 74.1%, there is a strong base of potential tenants who are likely to benefit from the rental assistance provided by the government.
In conclusion, ZIP 85701 in Tucson, AZ, serves as a cash-flow anchor within a Section 8 portfolio due to the alignment of FMR and market rents, indicating a stable and predictable income source. Landlords and small-portfolio investors can expect consistent returns without the necessity of frequently adjusting rents or offering discounts, thus anchoring their financial performance amidst fluctuating market conditions.
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.