Section 8 Fair Market Rent (FMR) for ZIP 90503 - 2027

Investment Score for ZIP 90503

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	$2,630
1 Bedroom	$2,930
2 Bedrooms	$3,620
3 Bedrooms	$4,590
4 Bedrooms	$5,140
5 Bedrooms	$5,962
6 Bedrooms	$6,677
7 Bedrooms	$7,211
8 Bedrooms	$7,572

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	$2,930	$469,901	0.62%	D
2BR	$3,620	$771,614	0.47%	F
3BR	$4,590	$1,247,238	0.37%	F
4BR	$5,140	$1,515,699	0.34%	F
5BR	$5,962	$1,724,426	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90503 (Torrance, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90503 in Torrance, California, is set by HUD for 2026. For a two-bedroom unit, the FMR is $3,160. This amount represents 30.1% of the median household income in the area, which stands at $125,912. However, the actual rental market in Torrance is significantly higher than the FMR. The Zillow median price for a two-bedroom rental unit is $789,031, which translates to a monthly rent of approximately $6,575 based on typical mortgage payments. This means that the actual rent is about 2.08 times the FMR, or a price-to-FMR ratio of 20.8x. This disparity creates significant constraints for voucher holders. They may struggle to find units that accept their vouchers due to the high cost of living in the area. Landlords might be reluctant to participate in the Section 8 program because the FMR does not cover the actual market rent. As a result, voucher holders often have limited options and may need to look outside the ZIP code for affordable housing. #### Affordability & Renter Profile ZIP code 90503 has a population of 43,454, with 47.4% of residents being renters. The occupancy rate is quite high at 92.8%, indicating a tight rental market. Given the median household income of $125,912, it is likely that most renters in this area are middle to upper-middle class individuals who can afford the high rents. However, the remaining 52.6% of homeowners might skew the income distribution upwards, making it challenging for lower-income renters to find suitable housing. The high price-to-FMR ratio suggests that the rental market is indeed very tight, with few units available at or below the FMR. This could lead to increased competition among voucher holders and other low-income renters for the limited affordable units. Additionally, the high median home value and rental prices indicate that the ZIP code is not particularly affordable for low-income families, who would likely face difficulties finding housing that fits within their budget. #### Investor Angle From an investor perspective, the ZIP code 90503 presents a mixed picture. While the actual rental market is strong, with median prices well above the FMR, the cash flow potential for Section 8-focused investments is limited. The FMR for a two-bedroom unit is $3,160, but the actual market rent is around $6,575. This means that landlords participating in the Section 8 program will receive only half of what they could potentially earn from market-rate rentals. The investment grade for this ZIP code would be considered low for Section 8 properties. The high price-to-FMR ratio indicates that the returns on investment would be lower compared to other areas where the FMR is closer to the actual market rent. Investors should consider the trade-offs between accepting Section 8 vouchers and renting at market rates. If they choose to participate in the Section 8 program, they must ensure that their investment property is located in a desirable area and is well-maintained to attract voucher holders. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should focus on acquiring units that are priced below the FMR to maximize their chances of attracting voucher holders. For example, a two-bedroom unit priced at $2,500 per month would be more attractive to voucher holders than one priced at $3,160. 2. **Consider Mixed-Income Developments**: Given the high price-to-FMR ratio, developers might want to consider mixed-income developments where some units are reserved for market-rate tenants and others for voucher holders. This approach can help balance the financial risks associated with participating in the Section 8 program. 3. **Enhance Property Value**: To remain competitive in the high-rent market, investors should consider enhancing the value of their properties through renovations and upgrades. This can make the property more appealing to both voucher holders and market-rate tenants, increasing the likelihood of tenancy. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market in ZIP code 90503, the recommendation for Section 8-focused investors is to **skip** this ZIP code. The financial constraints imposed by the FMR and the high cost of living in the area make it difficult to achieve positive cash flow from Section 8 properties. Instead, investors should look for areas with a lower price-to-FMR ratio and a more balanced rental market to maximize their returns while still serving low-income families effectively.

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.