Location: Kahului-Wailuku-Lahaina, HI | Metro: Kahului-Wailuku-Lahaina, HI HUD Metro FMR Area
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 | $2,340 |
| 1 Bedroom | $2,570 |
| 2 Bedrooms | $3,360 |
| 3 Bedrooms | $4,240 |
| 4 Bedrooms | $5,240 |
| 5 Bedrooms | $6,078 |
| 6 Bedrooms | $6,807 |
| 7 Bedrooms | $7,352 |
| 8 Bedrooms | $7,720 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,360 | $1,483,484 | 0.23% | F |
| 3BR | $4,240 | $1,175,104 | 0.36% | F |
| 4BR | $5,240 | $2,055,619 | 0.25% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP 96779, located in Paia, HI, highlights a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $2930, while the market rent, measured by ZORI (Zillow Observed Rent Index), stands at $4500. This represents a gap of $1570, or approximately 53.5%, indicating that landlords can potentially lease properties to voucher tenants at a rate significantly below the open-market price.
In Paia, where 39.2% of residents are renters, the median home value is $1,318,649, and the median income is $98,929, this gap presents both opportunities and challenges. The opportunity lies in the potential to generate consistent rental income through the Section 8 program, which guarantees timely payments. However, the challenge is the cost associated with housing voucher tenants below the prevailing market rates. Landlords must consider the reduced rental income against the backdrop of maintaining properties and covering operational costs.
To illustrate, if a landlord has a property valued at the median home value, they would need to ensure that the rental income from Section 8 vouchers sufficiently covers mortgage payments, property taxes, insurance, maintenance, and other expenses. Given the high median home value and the lower FMR compared to the market rent, it's crucial to evaluate the financial feasibility of participating in the Section 8 program.
The discrepancy also reflects the broader issue of affordability in Paia. With a median income of $98,929, many residents may struggle to afford the high market rents, making the Section 8 program a vital source of affordable housing. Landlords who choose to participate can play a critical role in addressing this need, but they must do so with a clear understanding of the financial implications.
Ultimately, the decision to engage with Section 8 tenants in ZIP 96779 should be based on a careful assessment of the property's financials, including the gap between FMR and market rent, and the overall economic conditions of the area. This approach will help landlords and small-portfolio investors make informed decisions that align with their investment goals and risk tolerance.
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.