Location: Santa Cruz-Watsonville, CA | Metro: Santa Cruz-Watsonville, CA MSA
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 | $3,380 |
| 1 Bedroom | $3,550 |
| 2 Bedrooms | $4,450 |
| 3 Bedrooms | $5,790 |
| 4 Bedrooms | $6,010 |
| 5 Bedrooms | $6,972 |
| 6 Bedrooms | $7,809 |
| 7 Bedrooms | $8,434 |
| 8 Bedrooms | $8,856 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,550 | $592,966 | 0.6% | F |
| 2BR | $4,450 | $757,468 | 0.59% | F |
| 3BR | $5,790 | $986,544 | 0.59% | F |
| 4BR | $6,010 | $1,127,265 | 0.53% | F |
U.S. Census Bureau data (2024)
The ZIP code 95005, located in Ben Lomond, CA, presents a dynamic rental market. The Fair Market Rent (FMR) for the area is set at $4210 for the fiscal year 2024, indicating a strong preference for higher-quality rentals. In contrast, the average market rent reported by the Census ACS stands at $2,279. This suggests that there's a significant gap between what the government deems as fair rent and what the market currently offers, hinting at potential upward pressure on rents.
The median home value in the area is $913,402, which places it in a high-value bracket, likely deterring first-time buyers and encouraging renting. With a renter share of 28.1%, we can infer that a considerable portion of the population opts for renting over buying. This percentage, while not overwhelming, signals a sustained demand for rental properties. Given the high median home value, it's reasonable to deduce that this demand will persist, as purchasing homes becomes increasingly challenging for many residents.
The lack of specific data regarding price-cut share and days on market (DOM) makes it difficult to conclusively state whether supply outpaces demand or vice versa. However, the substantial difference between the FMR and the actual market rent implies that demand might be exceeding supply, especially for higher-quality units. Landlords and small-portfolio investors should take note of these dynamics, as they suggest a favorable environment for rental investments in the short term.
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.