Section 8 Fair Market Rent (FMR) for ZIP 90018 - 2027

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,820
1 Bedroom	$2,030
2 Bedrooms	$2,510
3 Bedrooms	$3,180
4 Bedrooms	$3,560
5 Bedrooms	$4,130
6 Bedrooms	$4,626
7 Bedrooms	$4,996
8 Bedrooms	$5,246

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90018 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90018, as of 2026, is set at $2220 for a two-bedroom unit. This figure represents 42.4% of the median household income in the area, which stands at $62,864. However, the actual rental market in 90018 is significantly higher. The Zillow median price for a two-bedroom unit is $752,143, which translates to a price-to-FMR ratio of 28.2x. This means that landlords would need to charge well above the FMR to break even on their investments, making it challenging for Section 8 voucher holders to find suitable housing. For instance, a landlord renting a two-bedroom unit at the Zillow median price would be charging approximately $3117 per month, which is nearly 1.4x the FMR. This discrepancy places a significant constraint on voucher holders, who might struggle to secure housing that fits within their budget. #### Affordability & Renter Profile ZIP code 90018 has a high renter population, with 69.4% of households being renters. The occupancy rate is also quite high at 93.2%, indicating a tight rental market where demand outstrips supply. Given the high median home value and the relatively low median household income, affordability is a major concern for residents. The majority of renters in this area are likely to be lower-income individuals or families who rely heavily on subsidies such as Section 8 vouchers. However, due to the high actual rental costs compared to FMRs, these subsidies often fall short of covering the true cost of housing, leading to a situation where many renters are overburdened by housing expenses. #### Investor Angle From an investor perspective, the ZIP code 90018 presents a challenging environment for cash flow. At the FMR rates, landlords would likely struggle to cover the high mortgage payments associated with property values in this area. For example, a two-bedroom unit priced at $752,143 would require monthly mortgage payments that far exceed the FMR of $2220. Even if we consider a conservative mortgage rate of 4.5% and a 20-year amortization period, the monthly payment alone would be around $4400, which is more than double the FMR. Therefore, it is unlikely that properties rented at FMR levels will generate positive cash flow, especially when factoring in maintenance, insurance, and other operational costs. In terms of investment grade, the high price-to-FMR ratio suggests that this ZIP code is not favorable for investors looking to capitalize on Section 8 vouchers. The market dynamics indicate that there is a substantial gap between the FMR and the actual rental prices, which makes it difficult to achieve a reasonable return on investment without taking on significant financial risk. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units, such as one-bedroom apartments, where the FMR is $1780. While still challenging, these units may offer slightly better cash flow opportunities compared to larger units. For example, a one-bedroom unit priced at $500,000 would have a monthly mortgage payment of around $3000, which is closer to the FMR but still leaves little room for profit. 2. **Consider Alternative Subsidies**: Investors might want to explore alternative subsidy programs that offer higher payment standards than Section 8. Programs like Low-Income Housing Tax Credits (LIHTC) or state-specific housing assistance programs could provide better financial support for landlords, allowing them to maintain positive cash flow while still serving low-income tenants. #### Bottom Line For investors focused specifically on Section 8 vouchers, the ZIP code 90018 is not recommended. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow, and the constraints on voucher holders limit the pool of potential tenants. A "Skip" recommendation is appropriate unless investors can find ways to mitigate the financial risks through alternative subsidy programs or by targeting smaller units where the gap between FMR and actual rental prices is less pronounced.

Data Sources: FMR data from HUD (2027). 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.