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 | $2,870 |
| 1 Bedroom | $3,200 |
| 2 Bedrooms | $3,950 |
| 3 Bedrooms | $5,010 |
| 4 Bedrooms | $5,610 |
| 5 Bedrooms | $6,508 |
| 6 Bedrooms | $7,289 |
| 7 Bedrooms | $7,872 |
| 8 Bedrooms | $8,266 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,200 | $893,056 | 0.36% | F |
| 2BR | $3,950 | $2,196,023 | 0.18% | F |
| 3BR | $5,010 | $4,160,430 | 0.12% | F |
| 4BR | $5,610 | $5,733,087 | 0.1% | F |
| 5BR | $6,508 | $7,278,265 | 0.09% | F |
U.S. Census Bureau data (2024)
Santa Monica, CA's ZIP code 90402 is a high-end residential neighborhood that boasts a total population of 11,337. Only 26.1% of the residents are renters, indicating a predominantly owner-occupied area. The median household income in this ZIP code is a robust $159,100, reflecting the affluent nature of the community. Furthermore, the median home value stands at an impressive $4,759,745, underscoring the luxury real estate market in this part of Santa Monica.
The rental economics in ZIP 90402 are starkly different from the rest of the city. According to the Fair Market Rent (FMR) set for Section 8 vouchers in fiscal year 2024, the maximum allowable rent is $3,280. In contrast, the market rent as measured by the Zillow Observed Rental Index (ZORI) is significantly higher at $8,157. This wide disparity between FMR and market rent highlights the limited potential for Section 8 tenants in this ZIP code due to the high cost of living and the premium placed on housing.
Given these economic realities, ZIP 90402 is likely unsuitable for hands-off Section 8 operators who rely solely on voucher programs. The low percentage of renters and the substantial gap between FMR and market rent make it challenging to attract and retain Section 8 tenants. However, for hands-on value-add buyers willing to renovate and manage properties to cater to a mix of market-rate and potentially higher-income Section 8 tenants, there could be opportunities. These investors would need to focus on creating properties that appeal to a niche market, possibly offering amenities and services that justify the higher rents typical in this upscale neighborhood.
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.