Section 8 Fair Market Rent (FMR) for ZIP 94605 - 2027

Investment Score for ZIP 94605

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	$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

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	$2,150	$384,552	0.56%	F
2BR	$2,630	$523,383	0.5%	F
3BR	$3,360	$741,648	0.45%	F
4BR	$3,980	$1,001,956	0.4%	F
5BR	$4,617	$1,122,690	0.41%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94605 (Oakland, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94605 is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1750 - 1BR: $1990 - 2BR: $2420 - 3BR: $3090 - 4BR: $3670 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rents in the area are significantly higher. For instance, the Zillow median price for a 2BR unit is $521,977, which translates into a monthly rental cost of approximately $2,175 based on typical mortgage rates and property tax considerations. This means that the actual rent for a 2BR unit is around $2,175, which is notably higher than the FMR of $2,420. The constraints for voucher holders are evident when comparing their potential rent payments to the actual market rates. A voucher holder with a 2BR unit would have to find a landlord willing to accept a payment of $2,420, which is only slightly above the estimated market rate. Given the high demand and limited supply, landlords may be hesitant to accept these lower rates, thus making it challenging for voucher holders to secure housing. #### Affordability & Renter Profile ZIP code 94605 has a population of 44,103, with 37.1% being renters. The median household income is $106,068, indicating a relatively affluent area. However, the occupancy rate of 94.2% suggests that there is a strong demand for housing, leading to a tight market condition. Given that 27.4% of the median income is required for a 2BR unit, the affordability for low-income renters is strained. This percentage implies that a household earning the median income would need to allocate nearly one-third of their earnings towards housing costs, leaving little room for other expenses. The tight market conditions mean that there is likely a shortage of affordable units, particularly for those relying on Section 8 vouchers. The high price-to-FMR ratio of 18.0x further underscores the disparity between market rates and what voucher holders can afford. This makes it difficult for low-income renters to find suitable housing options within their budget. #### Investor Angle From an investor’s perspective, the ZIP code 94605 presents both opportunities and challenges. The FMRs set by HUD are designed to reflect the average market rent for the area, but they do not necessarily align with the actual rental prices. For a 2BR unit, the FMR is $2,420, while the estimated market rent is around $2,175. This suggests that an investor could potentially achieve positive cash flow if they manage to rent out their properties at the FMR. However, the challenge lies in finding tenants who can meet the FMR, especially given the high demand and limited supply. The investment grade for this ZIP code is moderate to high due to the strong demand for housing. However, the tight market conditions and the high price-to-FMR ratio indicate that investors should be cautious about overpaying for properties. They must ensure that the purchase price allows for a reasonable profit margin when renting at the FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider smaller units such as 0BR or 1BR apartments. These units typically have lower FMRs, making it easier to find tenants who can afford them. For example, a 0BR unit with an FMR of $1,750 might be more attractive to voucher holders compared to a 2BR unit with an FMR of $2,420. 2. **Consider Property Value**: Investors should carefully evaluate the purchase price of properties to ensure that they can achieve positive cash flow when renting at the FMR. For instance, a 2BR unit priced at $521,977 would need to generate a monthly rental income of around $2,175 to break even. If the purchase price is higher, investors should be prepared to either increase the rental rate beyond the FMR or accept a lower return on investment. #### Bottom Line For Section 8-focused investors, ZIP code 94605 presents a mixed landscape. While there is strong demand for housing, the high price-to-FMR ratio and tight market conditions make it challenging to find properties that offer positive cash flow at the FMR. Therefore, the recommendation is to **Hold** or **Skip** this ZIP code unless investors can secure properties at a discount or focus on smaller units where the FMR is closer to the actual market rent. In summary, the dynamics of the Section 8 program in ZIP code 94605 are constrained by the significant gap between FMRs and actual market rents. The high demand and limited supply create a challenging environment for both voucher holders and investors. Careful consideration of unit size and property value is essential for any investment strategy in this area.

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.