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 | $1,950 |
| 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 | $550,962 | 0.39% | F |
| 2BR | $2,630 | $785,900 | 0.33% | F |
| 3BR | $3,360 | $1,337,474 | 0.25% | F |
| 4BR | $3,980 | $1,601,366 | 0.25% | F |
| 5BR | $4,617 | $1,935,655 | 0.24% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,430 for ZIP 94704 in fiscal year 2024 can sufficiently cover the mortgage on a home priced at $1,156,661. According to recent housing market data, the average monthly mortgage payment for a home in this ZIP code is around $4,000, assuming a 30-year fixed-rate mortgage at an interest rate of approximately 5%. Clearly, the FMR does not cover the mortgage cost, indicating a potential gap that landlords must consider.
The investor may also wonder if the 87.6% renter demand rate is sufficient. Data shows that approximately 88.9% of housing units in ZIP 94704 are occupied by renters, with an average occupancy of 2.63 people per unit. This suggests a robust demand for rental properties, supporting the idea that there are enough tenants to fill available units. However, the rental vacancy rate stands at 3.6%, which is relatively low but still indicates some level of competition among landlords.
Another concern could be whether the voucher program can keep pace with the market rents, which currently average $3,250 per month. While the voucher amount of $3,258 seems to match the market rents, it's important to note that these figures can fluctuate based on location within the ZIP code and the type of property. Additionally, the effectiveness of vouchers depends on the willingness of landlords to accept them, which isn't always guaranteed. Some sources suggest that landlords in highly competitive markets like Berkeley may prefer cash-paying tenants over those with vouchers.
In summary, while there is strong tenant demand and voucher amounts nearly match market rents, the FMR does not cover the mortgage cost for a home valued at $1,156,661. Landlords should carefully assess their financial situation and consider diversifying their investment portfolio to mitigate risks associated with this ZIP code.
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.