Section 8 Fair Market Rent (FMR) for ZIP 90501 - 2027

Investment Score for ZIP 90501

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	$2,190
1 Bedroom	$2,450
2 Bedrooms	$3,020
3 Bedrooms	$3,830
4 Bedrooms	$4,290
5 Bedrooms	$4,976
6 Bedrooms	$5,573
7 Bedrooms	$6,019
8 Bedrooms	$6,320

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
1BR	$2,450	$476,931	0.51%	F
2BR	$3,020	$791,107	0.38%	F
3BR	$3,830	$981,070	0.39%	F
4BR	$4,290	$1,261,240	0.34%	F
5BR	$4,976	$1,442,168	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90501 (Torrance, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90501, as determined by HUD for 2026, is set at $2,570 for a two-bedroom unit. However, the Zillow median price for a two-bedroom home in this area is significantly higher at $806,706. This results in a price-to-FMR ratio of 26.2x, indicating that the actual rental market prices far exceed the FMR. For a Section 8 voucher holder, the maximum rent they can pay for a two-bedroom unit is capped at $2,570. This means that landlords in this area would likely have to accept a substantial discount on their asking rent if they want to attract tenants with Section 8 vouchers. The disparity between FMR and actual rents suggests that there is a significant constraint for voucher holders in finding affordable housing within the ZIP code. #### Affordability & Renter Profile ZIP code 90501 has a population of 41,787, with 56.4% of residents being renters. This high percentage indicates a strong demand for rental properties in the area. The occupancy rate stands at 93.0%, suggesting that the market is relatively tight, with few vacant units available. Given the median household income of $92,923, the average renter in this ZIP code would find it challenging to afford the high rental prices without assistance. The FMR for a two-bedroom unit represents only 33.2% of the median income, which implies that even the subsidized rent levels are relatively high compared to what most residents can afford. This makes the ZIP code particularly attractive for those seeking rental assistance through programs like Section 8. #### Investor Angle From an investor perspective, the ZIP code 90501 presents a mixed picture. While the high occupancy rate and strong demand for rental properties indicate potential stability and demand, the extremely high price-to-FMR ratio poses challenges. To determine whether this ZIP code is cash-flow positive at FMR, we need to consider the typical rental yields and expenses. Assuming a conservative rental yield of 5% on the median home value, the expected monthly rent for a two-bedroom property would be approximately $3,361 ($806,706 * 5% / 12). However, the FMR cap at $2,570 means that landlords would need to accept a significant reduction in rent to participate in the Section 8 program. Given the high costs associated with maintaining and managing properties in such a desirable area, the reduced rent might not cover all expenses, leading to negative cash flow. Therefore, while the market is robust and demand is high, the investment grade for Section 8-focused investors in this ZIP code is likely low due to the financial constraints imposed by the FMR caps. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as studios and one-bedroom apartments where the FMR is lower. For instance, the FMR for a one-bedroom unit is $2,060, which is still a significant discount from the median home value but may provide better cash flow opportunities. 2. **Consider Location-Specific Strategies**: Investors should look for areas within ZIP code 90501 where rental prices are slightly below the median, making it easier to find properties that align with the FMR caps. Additionally, targeting neighborhoods with higher concentrations of renters could help maximize the chances of attracting Section 8 voucher holders. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 90501 is to **Skip**. The extremely high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow when renting to tenants with Section 8 vouchers. Investors should consider other ZIP codes with more favorable ratios and less stringent financial constraints. If investing in 90501 is non-negotiable, focusing on smaller units and carefully selecting locations within the ZIP code could mitigate some of these risks, but the overall investment grade remains low.

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.