Section 8 Fair Market Rent (FMR) for ZIP 90016 - 2027

Investment Score for ZIP 90016

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	$2,030
1 Bedroom	$2,270
2 Bedrooms	$2,800
3 Bedrooms	$3,550
4 Bedrooms	$3,980
5 Bedrooms	$4,617
6 Bedrooms	$5,171
7 Bedrooms	$5,585
8 Bedrooms	$5,864

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	$2,270	$556,459	0.41%	F
2BR	$2,800	$766,047	0.37%	F
3BR	$3,550	$1,015,744	0.35%	F
4BR	$3,980	$1,136,776	0.35%	F
5BR	$4,617	$1,328,921	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90016 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90016 in 2026 is set at $2430 for a two-bedroom unit. This amount represents 39.7% of the median household income in the area, which is $73,516. However, the actual rental prices in the market significantly exceed these FMRs. The Zillow median price for a two-bedroom unit is $787,244, resulting in a price-to-FMR ratio of 27.0x. This means that the actual rent for a two-bedroom unit is approximately $65,610 per year, far exceeding the FMR of $2430. Given these figures, it is clear that there is a significant gap between the FMR and actual rents. For Section 8 voucher holders, this presents a major constraint. They would struggle to find affordable housing units that fall within their voucher limits, especially for larger units like three- and four-bedroom apartments, where the FMRs are $3080 and $3430 respectively. #### Affordability & Renter Profile ZIP code 90016 has a high occupancy rate of 90.7%, indicating that the housing market is relatively tight. With 65.1% of the population being renters, the demand for rental properties is strong. However, given the high price-to-FMR ratio, affordability is a significant issue for many residents, particularly those relying on Section 8 vouchers. The median household income of $73,516 suggests that the typical resident might find it challenging to afford the high rental prices. The fact that a two-bedroom apartment costs nearly 27 times the FMR indicates that the market is highly inflated and not aligned with the financial capabilities of most renters. Therefore, this is a tight market with limited options for low-income renters. #### Investor Angle From an investor perspective, the ZIP code 90016 presents a mixed picture. While the high rental prices indicate a robust demand, the alignment with Section 8 FMRs is poor. The FMR for a two-bedroom unit is $2430, but the actual rent could be much higher, around $65,610 annually based on the Zillow median. This makes it difficult for investors to achieve positive cash flow if they rely solely on Section 8 vouchers. The investment grade for this ZIP code would be considered low due to the mismatch between FMRs and actual rents. Investors looking to attract Section 8 voucher holders would need to offer rents well below the market average, which could result in negative cash flow or require substantial subsidies to make the units affordable. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on developing or acquiring smaller units such as studios or one-bedroom apartments. These units have lower FMRs ($1740 and $1950 respectively), making them more likely to align with the voucher limits and potentially generate positive cash flow. 2. **Consider Subsidies**: To make larger units more attractive to Section 8 voucher holders, investors might consider applying for additional government subsidies or grants. This could help bridge the gap between the FMR and the actual rental cost, making the units more affordable for low-income families. #### Bottom Line For investors focused on Section 8 vouchers, ZIP code 90016 is a challenging market due to the significant disparity between FMRs and actual rental prices. The recommendation is to **skip** this ZIP code unless you can secure additional subsidies or focus exclusively on smaller units where the FMRs are closer to the market rates. The tight market and high prices make it difficult to achieve positive cash flow without substantial adjustments or external support.

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.