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 | $1,660 |
| 1 Bedroom | $1,860 |
| 2 Bedrooms | $2,290 |
| 3 Bedrooms | $2,910 |
| 4 Bedrooms | $3,250 |
| 5 Bedrooms | $3,770 |
| 6 Bedrooms | $4,222 |
| 7 Bedrooms | $4,560 |
| 8 Bedrooms | $4,788 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,290 | $618,890 | 0.37% | F |
| 3BR | $2,910 | $707,886 | 0.41% | F |
| 4BR | $3,250 | $774,296 | 0.42% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 90040, located in Commerce, CA, within the Los Angeles-Long Beach-Glendale HUD Metro FMR Area, reveals several key points relevant to landlords and small-portfolio investors.
Firstly, the rent math does not work favorably for landlords. The Fair Market Rent (FMR) set at $2000 for fiscal year 2024 is significantly higher than the market rent reported by the Census ACS, which stands at $1,532. This discrepancy suggests that landlords may find it challenging to attract tenants willing to pay the FMR rate, given the lower market expectation.
Secondly, property acquisition in this area is moderately affordable. With a median home value of $695,301, purchasing properties here can be justified if the long-term rental income potential aligns with the higher FMR. However, the lack of data on days on market (DOM) and the percentage of homes requiring price cuts indicates an incomplete picture of the current housing market dynamics, which could pose risks for quick resale or maintaining high property values.
Lastly, there is a notable tenant demand in the area. With a population of 11,430, and 44.4% of residents being renters, the pool of potential tenants is substantial. This high renter share supports the idea that finding tenants should not be difficult, assuming the rent pricing is competitive and attractive.
Verdict: While there is a strong tenant demand in Commerce, CA, the disparity between the FMR and the actual market rent poses a significant challenge for landlords aiming to maximize their returns. Property acquisition is affordable but comes with some uncertainty due to missing market indicators. Landlords must carefully consider their pricing strategy to balance the need for competitive rents against the higher FMR, ensuring they attract and retain tenants while maintaining profitability.
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.