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 | $3,110 |
| 1 Bedroom | $3,480 |
| 2 Bedrooms | $4,290 |
| 3 Bedrooms | $5,440 |
| 4 Bedrooms | $6,090 |
| 5 Bedrooms | $7,064 |
| 6 Bedrooms | $7,912 |
| 7 Bedrooms | $8,545 |
| 8 Bedrooms | $8,972 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,480 | $600,947 | 0.58% | F |
| 2BR | $4,290 | $862,027 | 0.5% | F |
| 3BR | $5,440 | $1,129,911 | 0.48% | F |
| 4BR | $6,090 | $1,443,915 | 0.42% | F |
| 5BR | $7,064 | $1,898,714 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 91364 in Los Angeles, CA, reveals a stark contrast between the federally determined Fair Market Rent (FMR) and the actual market conditions. For a two-bedroom unit, the annualized FMR for FY 2024 is set at $3,820. In comparison, the Zillow Observed Rent Index (ZORI) for the same property type stands at $3,387 annually.
To derive the implied gross yield, we use the median home value of $1,309,627. The gross yield when using the FMR is calculated as follows:
The difference between these yields is minimal, but the ZORI figure is more reflective of current market realities. This conclusion is supported by the 29.1% renter density and the 33-day Days on Market (DOM), which indicate a robust rental market where properties are quickly occupied. Landlords should expect to operate closer to the ZORI figure, as it aligns with the observed demand and supply dynamics in the area.
Investors considering Section 8 properties in ZIP 91364 must recognize that the gross yields derived from both FMR and ZORI are extremely low. However, the ZORI yield provides a more accurate baseline for potential returns. Given the relatively high DOM, it suggests that landlords might face some competition in finding tenants, but the quick turnover indicates that once a tenant is found, the property will likely remain occupied for the duration of the lease term.
Therefore, while the Section 8 program can offer stability through government-backed payments, the low gross yields highlight the importance of thorough due diligence and understanding the local rental market. Landlords and small-portfolio investors should be prepared for a long-term investment strategy focused on steady, if modest, cash flows rather than high returns.
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.