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 | $3,230 |
| 1 Bedroom | $3,610 |
| 2 Bedrooms | $4,450 |
| 3 Bedrooms | $5,650 |
| 4 Bedrooms | $6,320 |
| 5 Bedrooms | $7,331 |
| 6 Bedrooms | $8,211 |
| 7 Bedrooms | $8,868 |
| 8 Bedrooms | $9,311 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,610 | $635,948 | 0.57% | F |
| 2BR | $4,450 | $1,166,545 | 0.38% | F |
| 3BR | $5,650 | $2,706,292 | 0.21% | F |
| 4BR | $6,320 | $3,925,229 | 0.16% | F |
| 5BR | $7,331 | $6,712,997 | 0.11% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 90049 in Los Angeles, CA, provides valuable insights into the potential returns for landlords and small-portfolio investors. To begin, we annualize the Fair Market Rent (FMR) for a two-bedroom apartment, which stands at $3820 per month according to FY 2024 data, against the median home value of $3,007,947. This calculation yields an implied gross yield of approximately 1.48%. The formula used here is (Annualized Rent / Median Home Value), where the annualized rent is $3820 multiplied by 12 months, equaling $45,840.
Next, we compare this with the Zillow Observed Rental Index (ZORI), which indicates a market rent of $3,952 per month. When this figure is annualized against the same median home value, the implied gross yield drops slightly to about 1.50%. The annualized market rent is calculated as $3,952 multiplied by 12 months, totaling $47,424.
Given the 46.6% renter density in ZIP 90049, it's important to note that the market conditions suggest a relatively balanced mix between homeowners and renters. Additionally, the Days on Market (DOM) statistic of 53 days points towards a moderately competitive rental environment, where properties are rented out within a reasonable timeframe.
The slightly higher gross yield based on market rent suggests a more optimistic scenario for landlords who can secure tenants willing to pay above the FMR. However, considering the renter density and DOM, the FMR-based gross yield of 1.48% appears more realistic. It aligns better with the actual demand and supply dynamics in the area, reflecting the true rental potential for Section 8 properties.
In conclusion, while both the FMR and market rent provide useful benchmarks, the FMR-based gross yield of 1.48% offers a more grounded expectation for Section 8 investments in ZIP 90049. This rate should be factored into any investment decision, alongside other financial metrics such as operating expenses and vacancy rates, to determine the net operating income (NOI) and ultimately the cap rate.
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.