Section 8 Fair Market Rent (FMR) for ZIP 90006 - 2027

Investment Score for ZIP 90006

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,860
1 Bedroom	$2,070
2 Bedrooms	$2,560
3 Bedrooms	$3,250
4 Bedrooms	$3,630
5 Bedrooms	$4,211
6 Bedrooms	$4,716
7 Bedrooms	$5,093
8 Bedrooms	$5,348

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,070	$475,193	0.44%	F
2BR	$2,560	$628,716	0.41%	F
3BR	$3,250	$774,644	0.42%	F
4BR	$3,630	$972,194	0.37%	F
5BR	$4,211	$1,187,825	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90006 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90006 is set by HUD for 2026 as follows: - 0BR: $1600 - 1BR: $1790 - 2BR: $2230 (which is 51.5% of the median household income) - 3BR: $2830 - 4BR: $3150 Comparing these figures to the actual rents in the area, we see a significant disparity. The Zillow median price for a 2BR unit in this ZIP code is $650,291, which translates to a monthly rent of approximately $2,709 if assuming a 5% annual rental yield. This means that the actual rent is nearly 24.3 times higher than the FMR for a 2BR unit, based on the price-to-FMR ratio provided. This high ratio indicates that there is a substantial gap between what the government deems as fair market rent and what landlords can charge. For voucher holders, this means that they face significant constraints in finding affordable housing. The maximum allowable rent under the Section 8 program would be $2,230 for a 2BR unit, but given the actual market rates, it is likely that very few units are available within this limit. Consequently, voucher holders may struggle to find suitable housing options, leading to potential difficulties in securing stable living arrangements. #### Affordability & Renter Profile ZIP code 90006 has a population of 55,527, with a median household income of $51,998. Notably, 90.3% of the residents are renters, indicating a highly rental-focused market. The occupancy rate also stands at 90.3%, suggesting that the demand for rental properties is strong and the market is relatively tight. Given the high proportion of renters and the occupancy rate, it is clear that the rental market in this ZIP code is robust and competitive. However, the affordability of housing is a major concern. With the FMR for a 2BR unit being only 51.5% of the median household income, many residents may find it challenging to afford even the government-set fair market rents. This tight market coupled with high prices makes it difficult for low-income households to secure housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 90006 presents a mixed picture when considering cash flow and investment grade. The actual market rent for a 2BR unit is approximately $2,709 per month, while the FMR is $2,230. This difference suggests that landlords participating in the Section 8 program could potentially earn less than the market rate, impacting their cash flow. However, the strong rental demand and high occupancy rate indicate that there is a steady stream of tenants, which could provide a reliable source of income. Additionally, the Section 8 program offers guaranteed payments, reducing the risk of vacancy and delinquency. Despite the lower rent compared to market rates, the stability and security offered by the program make it attractive for certain types of investors. The investment grade for this ZIP code would depend on various factors such as property management costs, maintenance expenses, and the overall financial health of the tenants. Given the high rent-to-income ratio and the tight market conditions, the investment grade would likely be moderate to low, especially for those looking for high returns. Investors should carefully consider the trade-offs between guaranteed payments and lower rental income. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR and 1BR apartments. These units have FMRs of $1600 and $1790 respectively, which are closer to the actual market rents. This could help mitigate some of the financial risks associated with larger units. 2. **Consider Property Location**: Within ZIP code 90006, there might be pockets where the actual rents are closer to the FMR. Investors should conduct thorough research to identify areas where the cost of living is slightly lower, allowing them to offer more competitive rents while still maintaining profitability. 3. **Engage in Value-Added Strategies**: Investors who own properties in this ZIP code should consider value-added strategies to improve the quality and appeal of their units. By enhancing the amenities and condition of the properties, they can justify slightly higher rents within the FMR limits, thereby improving cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 90006 is to **Hold**. While the high price-to-FMR ratio poses challenges, the strong rental demand and high occupancy rates provide a stable environment. Focusing on smaller units and engaging in value-added strategies can help optimize returns. However, the tight market and high rent-to-income ratio mean that opportunities for significant profit margins are limited. Therefore, holding existing investments and making incremental improvements is advisable rather than seeking new acquisitions.

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.