Section 8 Fair Market Rent (FMR) for ZIP 92024 - 2027

Investment Score for ZIP 92024

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	$2,860
1 Bedroom	$3,040
2 Bedrooms	$3,680
3 Bedrooms	$4,880
4 Bedrooms	$5,900
5 Bedrooms	$6,844
6 Bedrooms	$7,665
7 Bedrooms	$8,278
8 Bedrooms	$8,692

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$3,040	$840,471	0.36%	F
2BR	$3,680	$1,121,966	0.33%	F
3BR	$4,880	$1,709,389	0.29%	F
4BR	$5,900	$2,162,828	0.27%	F
5BR	$6,844	$3,171,260	0.22%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92024 (Encinitas, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 92024 is set by HUD for 2026 as follows: - 0BR: $2950 - 1BR: $3170 - 2BR: $3870 (which represents 29.3% of the median household income) - 3BR: $5160 - 4BR: $6250 Comparing these figures to actual rental rates in the area, we see a significant disparity. The Zillow median price for a 2BR unit is $1,108,372, which translates to a monthly rent of approximately $9,236 based on typical mortgage calculations. This results in a price-to-FMR ratio of 23.9x, indicating that the actual rental costs are much higher than the FMRs established by HUD. This high ratio means that voucher holders face substantial constraints. For instance, a voucher holder seeking a 2BR unit would have to find a landlord willing to accept $3870 per month, which is far below the market rate. Given the limited number of units available at such low rates, voucher holders might struggle to secure housing in Encinitas. #### Affordability & Renter Profile Encinitas has a population of 50,617, with 32.6% being renters. The median household income is $158,507, suggesting that residents are generally affluent. However, the high cost of living, particularly in terms of housing, makes it challenging for lower-income individuals to afford homes in this area. With a 2BR unit costing around $9,236 per month, the affordability gap is stark. The FMR for a 2BR unit is only $3870, which is less than half of what the market demands. This tight market condition implies that there is a significant shortage of affordable rental properties, especially for those relying on Section 8 vouchers. Given the occupancy rate of 91.7%, it’s clear that the demand for housing is high, and the supply is insufficient to meet the needs of all residents, particularly those with lower incomes. This situation exacerbates the challenges faced by voucher holders who must compete with other renters willing to pay market rates. #### Investor Angle From an investor perspective, the ZIP code 92024 presents a mixed picture. While the overall rental market is robust due to high occupancy and strong demand, the cash flow potential at FMR levels is questionable. To determine if the ZIP is cash-flow positive at FMR, we need to consider the average market rent and compare it to the FMR. With a market rent of $9,236 for a 2BR unit and an FMR of $3870, the difference is substantial. Investors who rely solely on FMR would likely struggle to cover their mortgage payments, maintenance costs, and other expenses associated with property ownership. The investment grade for this ZIP code would be considered low for Section 8-focused investors. The high price-to-FMR ratio suggests that the majority of rental units are priced well above the FMR, making it difficult to attract tenants with Section 8 vouchers. Additionally, the high median household income indicates that the local market is skewed towards higher-paying tenants, further reducing the attractiveness of FMR-based investments. #### Specific Actionable Insights 1. **Target Lower-Rent Units**: Investors should focus on acquiring properties with fewer bedrooms, such as 0BR or 1BR units, where the FMR is closer to the market rate. For example, a 1BR unit with an FMR of $3170 could potentially attract more voucher holders compared to a 2BR unit at $3870. 2. **Consider Non-Voucher Tenants**: Given the high median household income, there is a strong likelihood of attracting non-voucher tenants willing to pay market rates. An investor could consider a hybrid approach, offering some units at FMR while renting others at market rates to balance out the financials. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help investors understand the demand for Section 8 vouchers and potentially identify opportunities to convert existing properties into Section 8-friendly units. This could involve negotiating with landlords to accept slightly higher rents than the FMR but still within the range of what voucher holders can afford. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 92024 is to **Skip**. The high price-to-FMR ratio and the tight market conditions make it challenging to achieve positive cash flow when relying solely on FMR. Investors looking to enter this market should consider alternative strategies or target areas with more favorable FMR-to-market rent ratios. In conclusion, while Encinitas offers a vibrant and desirable living environment, the current market dynamics present significant hurdles for those interested in Section 8 investments. The focus should be on finding more financially viable opportunities elsewhere.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.