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 | $2,000 |
| 1 Bedroom | $2,190 |
| 2 Bedrooms | $2,680 |
| 3 Bedrooms | $3,430 |
| 4 Bedrooms | $4,060 |
| 5 Bedrooms | $4,710 |
| 6 Bedrooms | $5,275 |
| 7 Bedrooms | $5,697 |
| 8 Bedrooms | $5,982 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,190 | $701,139 | 0.31% | F |
| 2BR | $2,680 | $1,116,810 | 0.24% | F |
| 3BR | $3,430 | $1,407,492 | 0.24% | F |
| 4BR | $4,060 | $1,536,659 | 0.26% | F |
| 5BR | $4,710 | $1,661,210 | 0.28% | F |
U.S. Census Bureau data (2024)
The Section 8 program's impact in ZIP code 94703, which encompasses parts of Berkeley, CA, is significant due to the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $2530, while the market rent, as measured by the Zillow Rent Index (ZORI), is $2584. This creates a gap of $54, representing a 2.1% difference between the two figures.
Given that the FMR is lower than the market rent, landlords must consider the costs associated with housing voucher tenants at rates below the open-market level. The primary concern here is the potential reduction in rental income compared to what could be earned in the competitive Berkeley rental market. With 59.2% of residents renting, the demand for housing is high, but the median income of $109,881 suggests that many can afford higher rents. Therefore, landlords should weigh the benefits of guaranteed payments against the risk of leaving money on the table.
In Berkeley, where the median home value is $1,267,549, the gap between FMR and market rent highlights the broader affordability challenges faced by low-income renters. Despite the high median home value, the majority of residents are renters, indicating a strong reliance on the rental market. Landlords who participate in the Section 8 program will have to accept a slightly lower rate than they might charge in the open market, which could affect their overall yield. However, the stability provided by government-backed vouchers can be an attractive option, especially given the high demand for affordable housing.
To summarize, the FMR of $2530 is $54 less than the market rent of $2584, or 2.1% below. In Berkeley, CA, this means landlords will need to decide whether the benefits of a steady tenant flow outweigh the reduced rental income. Given the local context of high median home values and a large percentage of renters, the decision to participate in the Section 8 program should be carefully considered based on individual property management goals and financial needs.
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.