Section 8 Fair Market Rent (FMR) for ZIP 94306 - 2027

Location: San Jose-Sunnyvale-Santa Clara, CA | Metro: San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area

Investment Score for ZIP 94306

Monthly Rent (2BR)

$3,530

Median Price (2BR)

$1,770,552

1% Rule

0.2%

Annual Yield

2.39%

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	$2,650
1 Bedroom	$3,000
2 Bedrooms	$3,530
3 Bedrooms	$4,740
4 Bedrooms	$5,060
5 Bedrooms	$5,870
6 Bedrooms	$6,574
7 Bedrooms	$7,100
8 Bedrooms	$7,455

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	$3,000	$878,077	0.34%	F
2BR	$3,530	$1,770,552	0.2%	F
3BR	$4,740	$3,164,064	0.15%	F
4BR	$5,060	$3,894,949	0.13%	F
5BR	$5,870	$4,713,243	0.12%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

27,183

Median Household Income

$210,000

Housing Units

11,744

Renter Percentage

47.4%

Occupancy Rate

90.6%

Renter Occupied

5,046

The ZIP code 94306, located in the heart of Palo Alto, California, is renowned for its prestigious universities, tech startups, and affluent residents. This vibrant community offers a robust rental market driven by a high demand for housing from students, professionals, and families.

The Fair Market Rent (FMR) for ZIP 94306 in fiscal year 2024 is set at $3400, providing landlords with a benchmark for pricing their properties.
The market rent, as indicated by Zillow's ZORI index, stands at $3,489, closely aligning with the FMR and reflecting strong tenant interest in the area.
The median home value in ZIP 94306 is $3,494,446, demonstrating the significant investment potential for homeowners and real estate investors alike.
Renters make up 47.4% of the population, indicating a substantial demand for rental properties and opportunities for landlords to capitalize on this trend.
The days on market (DOM) for rental listings average 14 days, underscoring the brisk pace at which properties are leased in this highly sought-after location.
The median household income is $210,000, ensuring a stable and prosperous tenant base capable of affording high-quality housing.

Given the alignment between the Fair Market Rent and ZORI indices, coupled with the high median home value and substantial renter share, ZIP 94306 presents a favorable environment for landlords and small-portfolio investors. The quick turnaround time for rentals, along with the area's high median income, supports the viability of rental investments and suggests that maintaining competitive rents will ensure steady occupancy rates and strong returns on investment.

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.