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 | $1,920 |
| 1 Bedroom | $2,140 |
| 2 Bedrooms | $2,640 |
| 3 Bedrooms | $3,350 |
| 4 Bedrooms | $3,750 |
| 5 Bedrooms | $4,350 |
| 6 Bedrooms | $4,872 |
| 7 Bedrooms | $5,262 |
| 8 Bedrooms | $5,525 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,140 | $370,865 | 0.58% | F |
| 2BR | $2,640 | $720,093 | 0.37% | F |
| 3BR | $3,350 | $817,015 | 0.41% | F |
| 4BR | $3,750 | $870,631 | 0.43% | F |
| 5BR | $4,350 | $1,012,072 | 0.43% | F |
U.S. Census Bureau data (2024)
Skeptical investors looking at ZIP 90249, Gardena, CA, often have several key concerns that need addressing before committing to investment in Section 8 properties. The first objection is whether the Fair Market Rent (FMR) of $2,140 for the fiscal year 2024 will adequately cover the mortgage on a home priced at $811,695. This concern stems from the need to ensure financial stability and positive cash flow.
To address this, we must consider the mortgage payments on such a property. Assuming a typical down payment of 20%, the loan amount would be around $649,356. With an average mortgage rate, the monthly payment could range from $2,700 to $3,000, depending on the term length. At an FMR of $2,140, the rent does not fully cover the mortgage. However, this scenario assumes a single-family home; multi-unit properties can offer higher combined rental income, potentially covering the mortgage more effectively.
The second objection relates to the perceived lack of renter demand in the area, given the occupancy rate stands at 42.4%. This figure might seem low, but it's important to understand that it reflects the proportion of available units being rented. A lower occupancy rate can indicate opportunities for new investors to enter the market and fill gaps in supply. Moreover, Gardena's population and job growth trends suggest a steady demand for rental housing, even if the current occupancy rate appears modest.
The third concern is whether the Housing Choice Voucher program will keep up with market rents of $2,190. While the voucher amounts are set annually and do not always match market rents, they provide a stable source of income. In Gardena, the gap between voucher amounts and market rents is a consideration, but the consistency of the program's funding and the fact that it covers essential living costs make it a reliable tenant option. Additionally, many landlords find that the administrative support and maintenance guarantees provided by the voucher program outweigh the difference in rent.
In summary, while the FMR of $2,140 may not fully cover the mortgage on a $811,695 home, multi-unit investments present better opportunities. The occupancy rate of 42.4% indicates potential for growth, and although voucher amounts might lag behind market rents, they offer a dependable income stream. Each of these points should be carefully weighed against individual investment goals and risk tolerance.
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.