Section 8 Fair Market Rent (FMR) for ZIP 90247 - 2027

Investment Score for ZIP 90247

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	$1,970
1 Bedroom	$2,200
2 Bedrooms	$2,710
3 Bedrooms	$3,440
4 Bedrooms	$3,850
5 Bedrooms	$4,466
6 Bedrooms	$5,002
7 Bedrooms	$5,402
8 Bedrooms	$5,672

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
2BR	$2,710	$620,089	0.44%	F
3BR	$3,440	$764,900	0.45%	F
4BR	$3,850	$858,066	0.45%	F
5BR	$4,466	$945,060	0.47%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90247 (Gardena, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90247 is set by HUD for 2026. For a two-bedroom unit, the FMR is $2360. This figure represents 36.6% of the median household income in Gardena, which is $77,333. However, the actual rent prices in the area significantly exceed these figures. According to Zillow, the median price for a two-bedroom home is $626,785, indicating a price-to-FMR ratio of 22.1x. This suggests that actual rental prices are likely much higher than the FMR, making it challenging for Section 8 voucher holders to find suitable housing. The voucher program caps the amount that can be paid to landlords based on the FMR, so tenants may struggle to cover the remaining portion of the rent, especially if they are living in a two-bedroom unit where the FMR is only $2360 but the actual rental price could be several times higher. #### Affordability & Renter Profile ZIP code 90247 has a high percentage of renters, with 58.7% of households being renters. Given the median household income of $77,333, the affordability of housing is a significant concern. The occupancy rate of 94.8% indicates that the market is tight, with most units occupied. This tightness suggests that there is little room for new entrants into the rental market, and existing renters may face challenges finding affordable housing options. The high price-to-FMR ratio further exacerbates the issue, as it implies that the majority of available rentals are priced well above what is considered fair market rent. Consequently, the typical renter in this area is likely to be middle-class individuals who can afford higher rents, or those who rely heavily on financial assistance such as Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 90247 presents both opportunities and challenges. The FMRs provide a baseline for what the government considers affordable rent, but the actual rental market is far more expensive. For example, a two-bedroom unit's FMR is $2360, while the median home price is $626,785. This discrepancy means that investors looking to purchase properties and rent them out at FMR levels will likely have a difficult time achieving positive cash flow. To determine the investment grade, we need to consider the potential returns relative to the purchase price. If an investor buys a two-bedroom property at the median price of $626,785 and rents it out at the FMR of $2360, the monthly rent would be insufficient to cover mortgage payments, maintenance costs, and other expenses associated with owning a property. Assuming a typical mortgage rate of around 4.5%, the monthly payment on a $626,785 property would be approximately $3200, leaving a significant shortfall even before accounting for additional costs like insurance, property taxes, and maintenance. Therefore, the investment grade for this ZIP code is low, as the FMRs do not align with the actual market prices. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units, such as one-bedroom or studio apartments, where the FMR is lower. For instance, the FMR for a one-bedroom unit is $1890, which is still below the median home price but offers a better chance of covering mortgage and operational costs. This strategy can help mitigate the risk of negative cash flow. 2. **Consider Multi-Family Properties**: Multi-family properties, such as duplexes or small apartment buildings, might offer a more balanced approach. These properties often have lower per-unit costs compared to single-family homes, and the combined rental income from multiple units can provide a more stable cash flow. Additionally, multi-family properties may have more flexibility in terms of rent pricing due to their size and variety of unit types. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 90247 is to **skip** this area. The actual rental prices far exceed the FMR levels, making it difficult for voucher holders to find suitable housing. Moreover, purchasing properties at the median price and renting them out at FMR levels would likely result in negative cash flow, which is not a sustainable investment strategy. Instead, investors should look for areas where the FMRs are closer to the actual rental prices, offering a better chance of positive cash flow and alignment with the needs of Section 8 voucher holders.

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.