Location: Oakland-Fremont, CA | Metro: Oakland-Fremont, 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 | $1,930 |
| 1 Bedroom | $2,150 |
| 2 Bedrooms | $2,630 |
| 3 Bedrooms | $3,360 |
| 4 Bedrooms | $3,980 |
| 5 Bedrooms | $4,617 |
| 6 Bedrooms | $5,171 |
| 7 Bedrooms | $5,585 |
| 8 Bedrooms | $5,864 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,150 | $494,196 | 0.44% | F |
| 2BR | $2,630 | $809,259 | 0.32% | F |
| 3BR | $3,360 | $1,132,456 | 0.3% | F |
| 4BR | $3,980 | $1,385,669 | 0.29% | F |
| 5BR | $4,617 | $1,429,122 | 0.32% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 94602, located in Oakland, California, presents a unique challenge for landlords and small-portfolio investors due to the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $2170, while the Zero Occupancy Rate Index (ZORI), which reflects the market rent, stands at $2491. This creates a gap of $321 per month, or approximately 14.8%, between what voucher holders can pay and the open-market rent.
In Oakland, where 39.8% of residents are renters, the median home value is $986,878 and the median income is $122,263. Given these economic conditions, landlords should be aware that accepting Section 8 tenants means they will receive a lower rent payment compared to the market rate. The cost of housing voucher tenants below open-market rates must be considered against the stability of rental income provided by the federal government, which is less risky than dealing with non-voucher tenants who might default on rent payments.
The lower FMR compared to the ZORI suggests that landlords might see reduced profitability on a per-unit basis when renting to Section 8 tenants. However, the consistent and timely payment from the government can offset some of the financial risks associated with rental properties. Landlords must weigh the benefits of guaranteed income against the potential for higher yields from market-rate rentals.
To summarize, the gap between the FMR and ZORI in ZIP 94602 highlights the need for landlords to carefully evaluate their investment strategies. While the FMR is lower at $2170 compared to the market rent of $2491, the security of government-backed payments can make this a viable option for those seeking stable cash flows rather than high yields.
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.