Location: Riverside-San Bernardino-Ontario, CA | Metro: Riverside-San Bernardino-Ontario, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,530 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $3,170 |
| 5 Bedrooms | $3,677 |
| 6 Bedrooms | $4,118 |
| 7 Bedrooms | $4,447 |
| 8 Bedrooms | $4,669 |
U.S. Census Bureau data (2024)
The analysis for Section 8 properties in ZIP code 92220, located in Banning, CA, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1660, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2,126. This discrepancy amounts to a difference of $466 per month, representing a 27.9% discount compared to the open-market rental rates.
In Banning, where 29.1% of residents are renters and the median home value stands at $414,141, landlords must carefully consider the implications of accepting Section 8 vouchers. The lower FMR means that landlords will receive less rent from voucher tenants than they would from market-rate tenants. Given the median income in Banning is $62,599, many residents rely on affordable housing options, making Section 8 properties crucial for the local rental market.
The cost of housing voucher tenants below open-market rates can be substantial. Landlords might experience reduced cash flow, as the monthly rent received is $466 less than what the market dictates. This scenario requires a strategic approach to property management, focusing on long-term stability and government subsidies to offset the lower rents. While the initial yield might appear diminished, the guaranteed payment from the government and the stability of tenancy can provide a steady and reliable income stream, which is particularly valuable in an area with a high percentage of renters and limited affordable housing options.
Data Sources: FMR data from HUD (2027). 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.