Section 8 Fair Market Rent (FMR) for ZIP 90278 - 2027

Investment Score for ZIP 90278

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	$2,580
1 Bedroom	$2,880
2 Bedrooms	$3,550
3 Bedrooms	$4,500
4 Bedrooms	$5,040
5 Bedrooms	$5,846
6 Bedrooms	$6,548
7 Bedrooms	$7,072
8 Bedrooms	$7,426

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,880	$588,756	0.49%	F
2BR	$3,550	$975,346	0.36%	F
3BR	$4,500	$1,359,917	0.33%	F
4BR	$5,040	$1,639,676	0.31%	F
5BR	$5,846	$2,162,009	0.27%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90278 (Redondo Beach, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90278 in Redondo Beach, California, as of 2026 is set at $3110 for a two-bedroom unit. However, the actual median rent price for a two-bedroom unit, according to Zillow, is $973,585. This indicates that the actual rental prices are significantly higher than the FMR, with a price-to-FMR ratio of 26.1x. For Section 8 voucher holders, this means that the rent they can afford is far below the market rate. The voucher amount would only cover a small fraction of the actual rent, making it challenging for them to find suitable housing within their budget. Given that the FMR represents 23.3% of the median household income ($160,236), it is clear that the actual rental market is not aligned with the FMR guidelines. The disparity between the FMR and the actual rent prices suggests that voucher holders will likely struggle to find units that landlords are willing to accept at the FMR rates. #### Affordability & Renter Profile ZIP code 90278 has a relatively affluent population with a median household income of $160,236. Despite this high income level, 41.4% of residents are renters, indicating a significant demand for rental properties. The occupancy rate of 94.6% further supports the notion that the rental market is tight, with few vacancies available. Given the high median rent prices and the fact that the FMR covers only a small portion of these costs, it is evident that the rental market is highly competitive and not particularly affordable for low-income households. The typical renter in this area is likely to be someone who can afford the high rent prices, possibly young professionals or families with higher incomes. The high rent-to-income ratio makes it difficult for lower-income individuals to secure housing, especially those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 90278 presents a challenging scenario when considering cash flow based on FMR. The FMR for a two-bedroom unit is $3110, while the actual median rent price is $973,585. This means that if an investor were to rely solely on FMR rates, they would be severely under-renting their property, which could result in negative cash flow. To determine the investment grade, we must consider the potential for positive cash flow. Given the high actual rent prices, an investor could potentially achieve positive cash flow by renting at market rates rather than FMR. However, this would exclude the possibility of using Section 8 vouchers, which might limit the pool of tenants. #### Specific Actionable Insights 1. **Target High-Income Tenants**: Given the high actual rent prices and the limited number of units that can be rented at FMR, investors should target high-income tenants who can afford the market rates. This approach would ensure positive cash flow but would require marketing efforts to attract these tenants. 2. **Consider Mixed-Income Developments**: Investors could explore developing mixed-income properties where a portion of the units are rented at market rates, while others are rented at FMR to Section 8 voucher holders. This strategy could help balance cash flow while still providing affordable housing options. 3. **Evaluate Property Management Costs**: Due to the high price-to-FMR ratio, investors need to carefully evaluate their property management costs. If the cost of managing a property exceeds the FMR rental income, it would not be financially viable to accept Section 8 vouchers. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 90278 is to **skip** this market. The significant gap between FMR and actual rental prices makes it impractical to rely solely on Section 8 vouchers for tenant acquisition. Instead, investors should focus on areas where the FMR is closer to the actual rental prices, ensuring better cash flow and feasibility for accepting Section 8 vouchers. Alternatively, investors could consider a mixed-income development strategy to balance affordability and profitability.

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.