Section 8 Fair Market Rent (FMR) for ZIP 95066 - 2027

Location: Santa Cruz-Watsonville, CA | Metro: Santa Cruz-Watsonville, CA MSA

Investment Score for ZIP 95066

Monthly Rent (2BR)

$4,490

Median Price (2BR)

$778,806

1% Rule

0.58%

Annual Yield

6.92%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$3,410
1 Bedroom	$3,580
2 Bedrooms	$4,490
3 Bedrooms	$5,840
4 Bedrooms	$6,070
5 Bedrooms	$7,041
6 Bedrooms	$7,886
7 Bedrooms	$8,517
8 Bedrooms	$8,943

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$4,490	$778,806	0.58%	F
3BR	$5,840	$1,230,407	0.47%	F
4BR	$6,070	$1,571,414	0.39%	F
5BR	$7,041	$1,943,997	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

15,135

Median Household Income

$151,250

Housing Units

6,664

Renter Percentage

23.5%

Occupancy Rate

93.0%

Renter Occupied

1,458

Scotts Valley, CA, located in Santa Clara County, is a desirable suburban community known for its natural beauty and proximity to Silicon Valley. This area attracts a mix of families and young professionals, making it a prime location for real estate investment, particularly in the realm of Section 8 housing.

The Fair Market Rent (FMR) for Scotts Valley in fiscal year 2024 is set at $4680, indicating the maximum amount that can be charged for a Section 8 voucher in this region.
The market rent, as measured by Zillow's ZORI index, stands at $3,432, which is lower than the FMR, suggesting that landlords who participate in the Section 8 program could see higher rents compared to the average market rate.
The median home value in Scotts Valley is $1,269,302, reflecting a high-end residential market where Section 8 properties might offer a more affordable option for tenants.
Renters make up 23.5% of the housing market in Scotts Valley, showing a significant but not overwhelming demand for rental properties.
The median income in Scotts Valley is $151,250, which is considerably above the national average, pointing towards a financially stable tenant pool.

Investors considering the Section 8 market in Scotts Valley should note the discrepancy between the ZORI and FMR rates, which could present opportunities for higher returns on investment through government subsidies. The relatively low share of renters and the high median income suggest that while there is a need for affordable housing, the competition for tenants may be fierce. However, the robust financial health of the local population provides a strong foundation for rental stability and reduced risk of default.

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.