Location: Portland-Vancouver-Hillsboro, OR | Metro: Portland-Vancouver-Hillsboro, OR-WA 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 | $1,420 |
| 1 Bedroom | $1,510 |
| 2 Bedrooms | $1,730 |
| 3 Bedrooms | $2,360 |
| 4 Bedrooms | $2,800 |
| 5 Bedrooms | $3,248 |
| 6 Bedrooms | $3,638 |
| 7 Bedrooms | $3,929 |
| 8 Bedrooms | $4,125 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,360 | $687,563 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 97017 provides a clear picture of potential investment yields in this area. Using the annualized Fair Market Rent (FMR) for a two-bedroom apartment at $1750 per month, we can calculate an implied gross yield. The total annual rental income would be $21,000 ($1750 x 12 months). Given the median home value of $649,629, the implied gross yield based on the FMR would be approximately 3.23%. This calculation is derived by dividing the annual rental income by the property value: $21,000 / $649,629 = 0.0323 or 3.23%.
Comparing this to the market rent scenario, where the average monthly rent is $1,375 (as reported by the Census ACS), the total annual rental income drops to $16,500 ($1,375 x 12 months). The implied gross yield based on the market rent would then be about 2.54%, calculated as $16,500 / $649,629 = 0.0254 or 2.54%. This lower yield reflects the reality that market rents are generally less than FMRs, especially in areas with higher median home values.
Given the 7.5% renter density in ZIP 97017, it's important to note that the actual number of days on the market (DOM) is not available, which could impact the speed at which a property is rented out and the overall occupancy rates. However, the FMR-based gross yield of 3.23% is more indicative of the potential income from a Section 8 tenant, while the market rent yield of 2.54% reflects the broader rental market conditions.
Investors should consider these figures as part of their due diligence process, alongside other factors such as the local housing market trends, the cost of maintaining a property, and the administrative aspects of managing a Section 8 rental. The higher gross yield from the FMR scenario is more realistic for direct comparisons with Section 8 programs, whereas the market rent yield provides a benchmark against typical rental incomes in the area.
In summary, the Section 8 program offers a gross yield of 3.23% for a two-bedroom property in ZIP 97017, compared to the general market rent yield of 2.54%. This difference highlights the financial benefits of participating in the Section 8 program, despite the fixed rental rates and the need to comply with government regulations.
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.