Location: Los Angeles-Long Beach-Glendale, CA | Metro: Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
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 | $2,460 |
| 1 Bedroom | $2,750 |
| 2 Bedrooms | $3,390 |
| 3 Bedrooms | $4,300 |
| 4 Bedrooms | $4,810 |
| 5 Bedrooms | $5,580 |
| 6 Bedrooms | $6,250 |
| 7 Bedrooms | $6,750 |
| 8 Bedrooms | $7,088 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,750 | $591,258 | 0.47% | F |
| 2BR | $3,390 | $836,454 | 0.41% | F |
| 3BR | $4,300 | $1,150,133 | 0.37% | F |
| 4BR | $4,810 | $1,311,646 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 market analysis for ZIP code 90038 in Los Angeles, CA reveals a competitive landscape where landlords can expect marginal cash flow when accepting HUD Fair Market Rent (FMR) vouchers. The HUD FMR for this area is set at $2750 for fiscal year 2024. In comparison, the market rent, measured by Zillow's ZORI (Zillow Observed Rent Index), stands at $2,769. This indicates that landlords will see little to no additional cash flow beyond covering expenses, such as maintenance and property management, when renting to voucher holders at the HUD FMR rate.
To further understand the investment potential, consider the median home value in ZIP 90038, which is $1,034,637. Using the market rent figure of $2,769, the rent-to-price ratio is approximately 0.27%, suggesting that rental income alone does not significantly contribute to the overall value of properties in this area. However, for those interested in the long-term stability and predictability that comes with having tenants on Section 8 vouchers, this ratio is less critical than the assurance of consistent rental payments.
Regarding the typical days on market (DOM) and the percentage of listings that require a price cut, the data shows these metrics as N/A and 0.2%, respectively. These figures imply that the housing market in 90038 is stable and that there is minimal pressure to reduce asking prices, which can be beneficial for both rental and home ownership strategies. The low percentage of price cuts also suggests that the market is robust and that homes maintain their value well, providing a strong foundation for long-term investments.
In conclusion, while cash flow may be limited when renting to voucher holders at the HUD FMR rate, the stability and predictability of Section 8 tenancy make it an attractive option for landlords and small-portfolio investors looking to secure consistent returns without the volatility associated with other investment types. Stability remains the strongest angle for investors in ZIP 90038.
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.