Section 8 Fair Market Rent (FMR) for ZIP 90023 - 2027

Investment Score for ZIP 90023

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	$1,650
1 Bedroom	$1,840
2 Bedrooms	$2,270
3 Bedrooms	$2,880
4 Bedrooms	$3,220
5 Bedrooms	$3,735
6 Bedrooms	$4,183
7 Bedrooms	$4,518
8 Bedrooms	$4,744

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	$1,840	$497,072	0.37%	F
2BR	$2,270	$583,349	0.39%	F
3BR	$2,880	$647,670	0.44%	F
4BR	$3,220	$707,830	0.45%	F
5BR	$3,735	$782,331	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90023 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90023 is set by HUD for 2026, with the following figures: - 0BR: $1440 - 1BR: $1630 - 2BR: $2070 - 3BR: $2650 - 4BR: $2920 To understand how these figures compare to actual rents, we need to consider that the FMR represents the maximum amount that a Section 8 voucher holder can pay for rent. In ZIP 90023, the Zillow median price for a 2-bedroom rental property is $589,624, which translates to a monthly rent of approximately $4,913 assuming a 5% cap rate. This results in a price-to-FMR ratio of 23.7x, indicating that actual rents are significantly higher than the FMR. Given this disparity, voucher holders face significant constraints in finding suitable housing. The FMR for a 2BR unit is only $2070, while the actual rent would likely be much higher due to the high median home value. This makes it challenging for voucher recipients to find properties where landlords will accept their vouchers, especially since many landlords prefer higher-paying tenants who do not rely on government assistance. #### Affordability & Renter Profile ZIP 90023 has a population of 43,857, with 74.7% of residents being renters. The occupancy rate stands at 95.8%, suggesting a tight rental market with limited availability. Given the median household income of $59,057, the 2BR FMR of $2070 represents 42.1% of the median income. This indicates that the majority of residents are paying a substantial portion of their income towards rent, making the area less affordable for low-income families. The high percentage of renters and the occupancy rate suggest that there is a strong demand for rental units. However, the high median home value and the price-to-FMR ratio indicate that the market is primarily catering to higher-income individuals. This leaves a significant gap for low-income renters who might struggle to find affordable housing options. #### Investor Angle From an investor perspective, the ZIP code's cash flow potential needs to be evaluated against the FMR. Assuming a typical 5% cap rate, a 2BR property priced at $589,624 would generate a monthly rental income of $4,913. However, the FMR for a 2BR unit is only $2070. This means that if an investor were to purchase a property and rely solely on Section 8 vouchers, they would likely face negative cash flow. The investment grade for this ZIP code is low when considering the FMR constraints. While the median home value suggests a potentially lucrative market for investors targeting higher-paying tenants, those focusing specifically on Section 8 vouchers would find it difficult to achieve positive cash flow. The high price-to-FMR ratio further underscores the challenges faced by investors seeking to operate within the FMR guidelines. #### Specific Actionable Insights 1. **Focus on Higher-Paying Tenants**: Given the high price-to-FMR ratio, investors should focus on attracting tenants who can afford higher rents. This could involve marketing properties directly to higher-income individuals or offering amenities that justify the premium rent. 2. **Consider Mixed-Income Developments**: Investors could explore mixed-income developments where some units are rented to higher-income tenants while others are reserved for lower-income residents using Section 8 vouchers. This approach could help balance cash flow and meet the needs of a broader range of renters. 3. **Utilize Government Programs**: Investors might want to look into government programs that offer incentives for developers to build affordable housing. These programs could provide subsidies or tax breaks that make operating within the FMR more feasible. #### Bottom Line For Section 8-focused investors, the recommendation is to **skip** ZIP 90023. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow. Instead, investors should consider areas with lower price-to-FMR ratios or explore mixed-income development strategies to balance their portfolio. In summary, while ZIP 90023 presents a robust rental market with high demand, the constraints imposed by the FMR make it unsuitable for investors relying solely on Section 8 vouchers.

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.