Location: San Luis Obispo-Paso Robles, CA | Metro: San Luis Obispo-Paso Robles, 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 | $1,800 |
| 1 Bedroom | $1,970 |
| 2 Bedrooms | $2,580 |
| 3 Bedrooms | $3,450 |
| 4 Bedrooms | $3,990 |
| 5 Bedrooms | $4,628 |
| 6 Bedrooms | $5,183 |
| 7 Bedrooms | $5,598 |
| 8 Bedrooms | $5,878 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,970 | $625,245 | 0.32% | F |
| 2BR | $2,580 | $790,870 | 0.33% | F |
| 3BR | $3,450 | $1,047,125 | 0.33% | F |
| 4BR | $3,990 | $1,333,231 | 0.3% | F |
U.S. Census Bureau data (2024)
ZIP 93442, located in Morro Bay, CA, within the San Luis Obispo-Paso Robles, CA MSA, is best suited as a cash-flow anchor in a Section 8 portfolio strategy. This classification is based on the favorable spread between the Fair Market Rent (FMR) and the local market rental rates.
The FMR for ZIP 93442 in fiscal year 2024 is set at $2280. In comparison, the current market rental rate stands at $2486. This means that landlords participating in the Section 8 program can expect to receive a payment standard that closely aligns with market rents, ensuring stable and predictable cash flows. The difference of $206 between the FMR and the market rental rate indicates a tight margin, which is beneficial for maintaining positive cash flow without the need for significant subsidies from tenants.
Moreover, the high median home value of $954,534 suggests that the area is relatively affluent and stable, reducing the risk of property devaluation. This stability also supports the role of Morro Bay as a cash-flow anchor, as it provides a reliable base for rental income within a broader investment portfolio.
The low 0.3% price-cut share and N/A-day days on market (DOM) indicate that properties in this ZIP code do not often require deep discounts or extended listing periods, further reinforcing the suitability of Morro Bay as a cash-flow anchor. Properties here tend to be in demand, ensuring a steady stream of potential tenants and minimizing vacancy risks.
While the renter share of 34.1% and median income of $95,623 might suggest some diversification benefits, the primary advantage of ZIP 93442 lies in its ability to provide consistent and reliable cash flows due to the alignment of FMR with market rental rates. Landlords should focus on leveraging this ZIP code for its cash-flow stability rather than expecting significant capital appreciation or diversification benefits.
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.