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 | $2,048,094 | 0.18% | F |
| 2BR | $4,450 | $2,118,383 | 0.21% | F |
| 3BR | $5,650 | $2,767,186 | 0.2% | F |
| 4BR | $6,320 | $3,764,614 | 0.17% | F |
| 5BR | $7,331 | $4,668,617 | 0.16% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 90266, which covers Manhattan Beach, CA, presents a significant opportunity for landlords and small-portfolio investors due to the substantial gap between the Fair Market Rent (FMR) and the market rent. The FMR for ZIP 90266 in fiscal year 2024 is set at $3820, while the actual market rent, measured by Zillow's ZORI, stands at $5915. This means there is a $2095 difference between what the government will pay for a rental unit and what the market demands.
To put this into perspective, the gap represents approximately 55% of the FMR. For landlords, accepting Section 8 tenants means receiving a guaranteed payment that is well below the open-market rate. This can be seen as an added risk because it effectively reduces the potential rental income by a considerable margin. In Manhattan Beach, where only 35.2% of residents are renters and the median home value is $3,229,602, the rental market is already competitive. The median income in the area is $204,306, indicating a relatively affluent population that might prefer homeownership over renting, especially at rates higher than those covered by Section 8 vouchers.
Investors should consider the implications of this gap. While the guaranteed payment from the Housing Choice Voucher program ensures steady cash flow, the reduced rental income can impact overall property yields. Landlords must weigh the benefits of consistent, government-backed payments against the loss of potential revenue from market-rate rentals. Additionally, the lower FMR compared to the market rent suggests that landlords who accept Section 8 tenants may need to adjust their investment strategies to account for the reduced income, possibly through increased efficiency in property management or by seeking properties with lower acquisition costs.
In conclusion, the $2095 gap between the FMR and the market rent in Manhattan Beach highlights the financial considerations landlords face when deciding whether to participate in the Section 8 program. This gap underscores the importance of thorough financial planning and understanding the local rental market dynamics.
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.