Location: Hawaii County, HI | Metro: Hawaii County, HI
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 | $1,440 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,870 |
| 3 Bedrooms | $2,360 |
| 4 Bedrooms | $2,730 |
| 5 Bedrooms | $3,167 |
| 6 Bedrooms | $3,547 |
| 7 Bedrooms | $3,831 |
| 8 Bedrooms | $4,023 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,450 | $248,147 | 0.58% | F |
| 2BR | $1,870 | $349,735 | 0.53% | F |
| 3BR | $2,360 | $432,412 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 housing analysis for ZIP code 96785 in Volcano, HI, centers around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2026, the FMR is set at $1,870, while the Census ACS reports the average market rent at $1,217. This creates a significant gap of $653 per month, or 54%, which is crucial for landlords and small-portfolio investors to understand.
Given that the FMR exceeds the market rent, properties participating in the Section 8 program can be seen as a yield play. Landlords who accept vouchers can charge up to $1,870, which is substantially higher than the typical market rate of $1,217. This means that voucher tenants provide a higher monthly rental income, potentially improving cash flow and investment returns.
In the context of Volcano, HI, where only 16.5% of residents are renters, and the median home value stands at $365,245, the median income of $68,463 suggests that many local residents might struggle to afford the FMR. Thus, the higher rental rates supported by Section 8 vouchers become even more attractive for landlords looking to maximize their earnings.
However, it's important to note that accepting Section 8 tenants comes with its own set of considerations. The administrative burden and compliance requirements can offset some of the financial gains. Additionally, the high median home value indicates a robust homeownership market, which could affect the demand for rental properties among voucher holders.
To summarize, the $653 monthly gap, representing a 54% premium over market rents, makes Section 8 participation a compelling strategy for increasing rental yields in Volcano, HI. Despite the challenges, the financial benefits are substantial, particularly in an area where the median income is lower than the FMR.
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.