Location: Santa Cruz-Watsonville, CA | Metro: Santa Cruz-Watsonville, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $3,570 |
| 1 Bedroom | $3,750 |
| 2 Bedrooms | $4,700 |
| 3 Bedrooms | $6,120 |
| 4 Bedrooms | $6,360 |
| 5 Bedrooms | $7,378 |
| 6 Bedrooms | $8,263 |
| 7 Bedrooms | $8,924 |
| 8 Bedrooms | $9,370 |
U.S. Census Bureau data (2024)
Santa Cruz-Watsonville, CA MSA metro's ZIP code 95017 can be effectively utilized in a Section 8 portfolio strategy as a cash-flow anchor. The Federal Market Rent (FMR) for ZIP 95017 in fiscal year 2024 is set at $4630. This figure represents the maximum rental amount that the government will subsidize for low-income tenants participating in the Section 8 program.
In contrast, the current market rent for ZIP 95017 stands at $1,592. This significant disparity between the FMR and the market rent highlights the potential for substantial positive cash flow when properties are rented through the Section 8 program. Landlords can secure higher rents compared to the local market rate, ensuring that their investment remains financially viable even in an area where market rents are relatively low.
The median home value in ZIP 95017 is $980,903, which is considerably high for the region. Despite the high home values, the median income of $102,625 suggests that many residents may still qualify for the Section 8 program due to the high cost of living. With 62.4% of the population being renters, there is a robust demand for affordable housing options, making Section 8 properties particularly attractive.
The high FMR relative to the market rent means that landlords can expect to receive a steady stream of income that exceeds what they would typically earn from renting to non-Section 8 tenants. This makes ZIP 95017 an ideal choice for those looking to stabilize their portfolio with reliable cash flow sources. While appreciation plays and diversification strategies have their merits, the clear advantage in cash flow provided by the Section 8 program in this ZIP code outweighs other considerations.
Data Sources: FMR data from HUD (2027). 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.