Location: San Diego-Chula Vista-Carlsbad, CA | Metro: San Diego-Chula Vista-Carlsbad, CA MSA
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 | $3,070 |
| 1 Bedroom | $3,270 |
| 2 Bedrooms | $3,950 |
| 3 Bedrooms | $5,240 |
| 4 Bedrooms | $6,330 |
| 5 Bedrooms | $7,343 |
| 6 Bedrooms | $8,224 |
| 7 Bedrooms | $8,882 |
| 8 Bedrooms | $9,326 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,270 | $405,533 | 0.81% | C |
| 2BR | $3,950 | $686,246 | 0.58% | F |
| 3BR | $5,240 | $1,156,504 | 0.45% | F |
| 4BR | $6,330 | $1,614,038 | 0.39% | F |
| 5BR | $7,343 | $2,101,976 | 0.35% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 92131 in San Diego, CA, reveals a notable gap between the federal market rent (FMR) and the market rent, impacting potential gross yields for investors. For the fiscal year 2024, the annualized FMR for a 2-bedroom apartment in ZIP 92131 is $3,970, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $3,431 per month.
Given the median home value in ZIP 92131 is $1,502,266, we can calculate the implied gross yield for both scenarios. The FMR scenario suggests a gross yield of approximately 3.31%, calculated as follows: ($3,970 * 12) / $1,502,266 = 3.31%. On the other hand, using the ZORI market rent, the gross yield drops to around 2.75%, calculated by: ($3,431 * 12) / $1,502,266 = 2.75%.
The difference in these gross yields highlights the financial implications of relying on Section 8 versus market rents. However, considering the 19.9% renter density and an average days on market (DOM) of 19 days, the market rent scenario appears more realistic. The low DOM suggests that units are occupied quickly, indicating strong demand for rental properties in the area. Additionally, the relatively low renter density implies that landlords might have difficulty filling units solely through the Section 8 program, making market rents a more reliable income source.
In conclusion, while the FMR provides a higher gross yield, the market conditions in ZIP 92131 favor the ZORI market rent as a more practical basis for investment decisions. This analysis should guide landlords and small-portfolio investors in understanding the potential returns and setting realistic expectations for their properties in this ZIP code.
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.