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 | $3,870 |
| 1 Bedroom | $4,060 |
| 2 Bedrooms | $5,100 |
| 3 Bedrooms | $6,630 |
| 4 Bedrooms | $6,890 |
| 5 Bedrooms | $7,992 |
| 6 Bedrooms | $8,951 |
| 7 Bedrooms | $9,667 |
| 8 Bedrooms | $10,150 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $4,060 | $860,850 | 0.47% | F |
| 2BR | $5,100 | $1,154,979 | 0.44% | F |
| 3BR | $6,630 | $1,422,817 | 0.47% | F |
| 4BR | $6,890 | $1,706,293 | 0.4% | F |
| 5BR | $7,992 | $2,017,419 | 0.4% | F |
U.S. Census Bureau data (2024)
46.5% of residents in ZIP 95062, Santa Cruz, CA, are renters, indicating a strong demand for rental properties in the area. $4290 is the Fair Market Rent (FMR) set for zip code FY 2024, which represents the upper limit for Section 8 payments in the region. Comparatively, the market rent, known as ZORI, stands at $3,470, suggesting that properties priced below the FMR could still attract market-rate tenants while being eligible for Section 8 subsidies. The median home value in Santa Cruz is $1,316,378, reflecting a high-end real estate market but also providing insight into the potential investment value of rental properties. Despite the high median home value, the median income of $112,106 is relatively modest, pointing to a significant disparity between income levels and housing costs. This economic reality makes affordable housing options, such as those supported by Section 8, crucial for many local residents. The price-cut share of 0.1% indicates that property values in Santa Cruz are stable, with minimal need for price reductions to sell homes, which is a positive sign for long-term investment. While the days on market (DOM) is listed as N/A, it's clear that the rental market remains robust. Given these figures, landlords and small-portfolio investors should consider the benefits of participating in the Section 8 program to tap into a reliable source of rental income while serving a critical community need.
Section 8 Verdict: ZIP 95062 presents a viable opportunity for Section 8 investments, with a strong rental demand and favorable pricing relative to market rents.
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.