Section 8 Fair Market Rent (FMR) for ZIP 94566 - 2027

Investment Score for ZIP 94566

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	$2,350
1 Bedroom	$2,570
2 Bedrooms	$3,150
3 Bedrooms	$4,030
4 Bedrooms	$4,770
5 Bedrooms	$5,533
6 Bedrooms	$6,197
7 Bedrooms	$6,693
8 Bedrooms	$7,028

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
2BR	$3,150	$784,172	0.4%	F
3BR	$4,030	$1,354,408	0.3%	F
4BR	$4,770	$1,790,425	0.27%	F
5BR	$5,533	$2,685,584	0.21%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94566 (Pleasanton, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94566 is set by HUD for the year 2026. For a two-bedroom apartment, the FMR is $3,320. However, the actual rental market in Pleasanton is significantly higher. According to Zillow, the median price for a two-bedroom home is $815,035, which translates into a rental value that is approximately 20.5 times the FMR. This means that the actual rent for a two-bedroom unit would be around $68,060 per year, or roughly $5,672 per month. Given that the FMR is only $3,320, this creates a substantial gap between what voucher holders can afford and the actual rental rates in the area. Consequently, tenants with Section 8 vouchers face significant constraints in finding suitable housing within their budget. #### Affordability & Renter Profile Pleasanton has a median household income of $191,155, indicating that it is a high-income area. The renter population makes up 29.4% of the total population, suggesting that while a considerable portion of residents are renters, they likely have the financial means to pay market rates. With an occupancy rate of 95.2%, the market is relatively tight, meaning there is little excess supply. This tightness further exacerbates the affordability issue for lower-income renters who rely on assistance programs like Section 8. Given the high median income and the high price-to-FMR ratio, it is evident that the majority of renters in this area are able to pay market rates. For a two-bedroom unit, the FMR represents only about 20.8% of the median household income, which is quite low. This suggests that the rental market is primarily catering to individuals and families with higher incomes, making it challenging for those with Section 8 vouchers to find affordable housing. #### Investor Angle From an investor perspective, the rental market in ZIP code 94566 is highly lucrative. The actual rental rates are much higher than the FMR, providing a strong potential for cash flow. For instance, a two-bedroom unit could command a monthly rent of $5,672, compared to the FMR of $3,320. This difference indicates that landlords can achieve significant positive cash flow if they are able to secure market-rate tenants. However, for investors focusing specifically on Section 8 vouchers, the situation is less favorable. The FMR is far below the market rates, and the tight market conditions mean that there is limited demand from voucher holders. Additionally, the stringent requirements and bureaucratic processes associated with Section 8 can make it a less attractive option for landlords seeking stable and high-yielding investments. #### Specific Actionable Insights 1. **Focus on Market-Rate Tenants**: Given the high price-to-FMR ratio and the tight market, investors should prioritize securing market-rate tenants over those relying on Section 8 vouchers. A two-bedroom unit rented at $5,672 per month would generate a much higher annual income ($68,064) compared to the FMR-based rent ($3,320 per month, or $39,840 annually). 2. **Consider Multi-Family Properties**: Since the renter population is 29.4%, multi-family properties might offer better opportunities for cash flow. Investors could consider purchasing or developing larger complexes where a mix of market-rate and subsidized units could be offered, potentially attracting a broader range of tenants. 3. **Explore Alternative Subsidy Programs**: While Section 8 vouchers are limited due to the high cost of living, other subsidy programs or local initiatives might provide more flexibility. Investigating these options could help bridge the gap between market rates and affordable housing needs. #### Bottom Line For investors focused on Section 8 vouchers, the ZIP code 94566 presents a challenging environment due to the high cost of living and limited demand from voucher holders. The recommendation would be to **Skip** this ZIP code for Section 8-focused investments. Instead, investors should look towards areas with a higher percentage of renters and a more favorable price-to-FMR ratio. Alternatively, they could explore other types of investments that cater to the broader market, leveraging the high rental rates to achieve positive cash flow.

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.