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 | $2,560 |
| 1 Bedroom | $2,860 |
| 2 Bedrooms | $3,530 |
| 3 Bedrooms | $4,480 |
| 4 Bedrooms | $5,010 |
| 5 Bedrooms | $5,812 |
| 6 Bedrooms | $6,509 |
| 7 Bedrooms | $7,030 |
| 8 Bedrooms | $7,382 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,860 | $513,212 | 0.56% | F |
| 2BR | $3,530 | $741,748 | 0.48% | F |
| 3BR | $4,480 | $1,225,587 | 0.37% | F |
| 4BR | $5,010 | $2,571,473 | 0.19% | F |
| 5BR | $5,812 | $4,029,796 | 0.14% | F |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP 91106 (Pasadena, CA) for Section 8 properties, follow these steps:
Step 1: Can the Fair Market Rent (FMR) of $2910 cover the debt service on a $932,661 property?
Yes. If the landlord can secure a mortgage rate that allows the FMR to cover the monthly debt service, then the investment is feasible. For example, a mortgage rate of 4.5% would result in a monthly payment of approximately $4,700, which is higher than the FMR. However, if the landlord can find a lower rate or a property with a lower purchase price, the FMR could potentially cover the debt service.
No. If the FMR cannot cover the monthly debt service, the investment is not recommended. The FMR of $2910 is below the estimated monthly mortgage payment for a property costing $932,661, indicating that the landlord would need additional income sources to meet financial obligations.
It depends. The feasibility hinges on the mortgage rate and terms. At a higher rate, the answer is no. At a lower rate or with a smaller loan amount, the answer could be yes.
Step 2: How does the Zillow Observed Rent Index (ZORI) of $2,832 compare to the FMR?
ZORI is below FMR. This indicates that the market rent is lower than the FMR, which means the landlord can charge the higher FMR rate to Section 8 tenants. This is favorable for Section 8 investments.
ZORI is equal to or above FMR. This scenario is less likely given the provided data but would mean that the landlord cannot leverage the higher FMR rate for Section 8 tenants. In such cases, the investment would be less attractive.
Step 3: Is there sufficient demand with 64.1% renters and an unknown days on market (DOM)?
Yes. With 64.1% of the population renting, there is a high demand for rental units. The unknown DOM suggests either a strong market where units are rented quickly or a lack of recent data. Given the high percentage of renters, the demand is likely robust.
No. If the DOM were significantly high, it would indicate difficulty in leasing units, making the investment less attractive. However, the current data does not provide this information.
It depends. The strength of the rental market in Pasadena, CA, is indicated by the high percentage of renters. But without DOM data, it's unclear how quickly units can be leased. If the landlord has access to local real estate listings and can confirm quick leasing times, the investment is more viable.
In conclusion, based on the provided data, ZIP 91106 presents a mixed picture for Section 8 investments. The high percentage of renters signals strong demand, and the FMR exceeding market rent offers an advantage. However, the ability to cover debt service and the exact leasing speed remain critical factors that will influence the final decision.
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.