Location: San Francisco, CA | Metro: San Francisco, 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 | $2,350 |
| 1 Bedroom | $2,740 |
| 2 Bedrooms | $3,370 |
| 3 Bedrooms | $4,400 |
| 4 Bedrooms | $4,960 |
| 5 Bedrooms | $5,754 |
| 6 Bedrooms | $6,444 |
| 7 Bedrooms | $6,960 |
| 8 Bedrooms | $7,308 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,740 | $852,469 | 0.32% | F |
| 2BR | $3,370 | $1,242,369 | 0.27% | F |
| 3BR | $4,400 | $1,706,082 | 0.26% | F |
| 4BR | $4,960 | $2,172,072 | 0.23% | F |
| 5BR | $5,754 | $2,426,742 | 0.24% | F |
U.S. Census Bureau data (2024)
San Francisco’s 94110 zip code, encompassing the Mission District and parts of the Inner Mission, is a vibrant, high-density neighborhood known for its historic Victorian architecture, colorful murals, and bustling culinary scene. The area serves as a major cultural hub, featuring Dolores Park as a central recreational anchor. A significant institutional presence here is the UCSF Mission Bay campus nearby, which drives demand from medical professionals and graduate students seeking housing close to work. This neighborhood is characterized by a walkable, urban feel with heavy reliance on public transit, including BART and Muni lines, making it highly desirable for renters who prioritize commute accessibility.
Financially, 94110 presents a challenging landscape for Section 8 operators due to a wide rent gap. The FY2026 2-Bedroom Fair Market Rate (FMR) sits at $3,080, yet current market rent (Zillow ZORI) commands $3,919, creating a shortfall of $839 per month. Median home values are substantial at $1,332,592, with a median 2BR sale price of $1,176,904. Inventory moves incredibly fast, with a median days on market (Redfin) of just 14 days. Given the acquisition cost and the HUD payment ceiling, cash-flowing a standard 2BR unit solely with voucher subsidies is difficult in this specific submarket.
Despite the tight cash-flow margins, the tenant demand fundamentals remain robust. The area boasts a 58.2% renter share and a median household income of $158,351, indicating a population that can afford high rents but often competes for limited inventory. This high income baseline suggests that while voucher demand exists, it competes with unassisted professionals. The neighborhood’s amenities, including top-rated public schools like Mission Education Center and proximity to the 24th Street BART station, sustain a constant influx of families and workers, ensuring low vacancy risk regardless of the tenant payment type.
The Section 8 verdict for 94110 leans toward an appreciation and stability play rather than immediate cash-flow. Investors should focus on smaller unit types where the math is tighter, such as studios at $2,120 versus 1BRs at $2,540. The rapid 14-day turnover and $1.3 million-plus median values imply strong asset appreciation. For a portfolio landlord, the strategy here is accepting a potential modest monthly loss or break-even on the voucher side to secure a highly appreciating asset in a location with essentially zero vacancy risk.
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.