Location: Santa Ana-Anaheim-Irvine, 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 | $2,350 |
| 1 Bedroom | $2,380 |
| 2 Bedrooms | $2,790 |
| 3 Bedrooms | $3,790 |
| 4 Bedrooms | $4,520 |
| 5 Bedrooms | $5,243 |
| 6 Bedrooms | $5,872 |
| 7 Bedrooms | $6,342 |
| 8 Bedrooms | $6,659 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,790 | $633,318 | 0.44% | F |
| 3BR | $3,790 | $1,052,179 | 0.36% | F |
| 4BR | $4,520 | $1,247,631 | 0.36% | F |
| 5BR | $5,243 | $1,321,462 | 0.4% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 properties in ZIP code 90623, located in La Palma, California, are significant and must be carefully considered. Firstly, tenant turnover could pose a challenge, with the market rent at $2,259 being notably lower than the Fair Market Rent (FMR) of $2,600 for fiscal year 2024. This disparity suggests that tenants might prefer higher-paying options outside of the Section 8 program, leading to frequent moves and increased vacancy periods.
Vacancy exposure is another critical issue. The days on market (DOM) for the area is not available, which makes it difficult to predict how long a property might remain vacant. A prolonged vacancy can lead to financial losses, especially when the rental income is tied to government subsidies that require occupied units to receive payments.
Deferred maintenance is also a concern. With a typical home value of $1,212,312 and a median income of $116,594, landlords may find themselves responsible for substantial upkeep costs. The financial strain of maintaining properties while receiving a fixed subsidy rate could be considerable, particularly if the property requires significant repairs or upgrades.
Despite these challenges, the high renter share of 32.6% in ZIP 90623 indicates a strong potential demand for rental properties, including those that accept Section 8 vouchers. High renter density often translates into a robust market for subsidized housing, making it easier to attract and retain tenants who are eligible for the program.
In conclusion, the investment in Section 8 properties in La Palma, CA (ZIP 90623), presents a moderate risk for a first-time landlord. While there are significant risks associated with tenant turnover, vacancy exposure, and deferred maintenance, the high renter share provides a counterbalance, ensuring a steady pool of potential tenants.
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.