Location: Lewis County, WA | Metro: Olympia-Lacey-Tumwater, 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 | $1,390 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,360 |
| 4 Bedrooms | $2,960 |
| 5 Bedrooms | $3,434 |
| 6 Bedrooms | $3,846 |
| 7 Bedrooms | $4,154 |
| 8 Bedrooms | $4,362 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,770 | $329,360 | 0.54% | F |
| 3BR | $2,360 | $418,245 | 0.56% | F |
| 4BR | $2,960 | $477,709 | 0.62% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 98531, Centralia, WA, reveals a significant gap between the Fair Market Rent (FMR) and the Zillow Rent Index (ZORI). The FMR for ZIP 98531 in fiscal year 2024 is set at $1360, while the ZORI stands at $1400. This represents a $40 difference, or approximately 2.94%, between the two figures.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors must consider the implications of renting to voucher tenants at rates below the open-market level. While the federal government covers a portion of the rent through the Housing Choice Voucher program, the remaining balance is expected to be paid by the tenant. In ZIP 98531, where the median household income is $63,406, it's essential to understand that a significant portion of the population—34.3%—are renters. This high percentage of renters underscores the importance of the Section 8 program in providing affordable housing options.
The median home value in Centralia, WA, is $396,405, indicating a relatively stable housing market. However, the disparity between the FMR and ZORI suggests that landlords may face challenges in maintaining their yields when accepting Section 8 vouchers. To illustrate, if a landlord sets the rent at the ZORI rate of $1400, but only receives the FMR rate of $1360, they would effectively be subsidizing the remaining $40 per month. Over the course of a year, this amounts to $480, which can add up significantly across multiple units.
Despite these costs, the Section 8 program offers stability and a reliable source of income. Tenants who receive vouchers are often required to pay only 30% of their adjusted income towards rent, making them less likely to default on payments. This predictability can be particularly advantageous in an area like Centralia, where the local economy may be more sensitive to fluctuations.
In conclusion, the gap between the FMR and ZORI in ZIP 98531 highlights the financial considerations for landlords participating in the Section 8 program. While there is a slight reduction in monthly rental income, the benefits of stable tenancy and federal support can make it a worthwhile investment strategy.
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.