Location: Santa Rosa-Petaluma, CA | Metro: Santa Rosa-Petaluma, 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 | $2,170 |
| 1 Bedroom | $2,360 |
| 2 Bedrooms | $3,090 |
| 3 Bedrooms | $4,280 |
| 4 Bedrooms | $4,710 |
| 5 Bedrooms | $5,464 |
| 6 Bedrooms | $6,120 |
| 7 Bedrooms | $6,610 |
| 8 Bedrooms | $6,941 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,090 | $545,314 | 0.57% | F |
| 3BR | $4,280 | $727,493 | 0.59% | F |
| 4BR | $4,710 | $892,823 | 0.53% | F |
| 5BR | $5,464 | $1,090,984 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 95405 in Santa Rosa, CA, reveals an interesting dynamic between government rental assistance and market rents. For a two-bedroom property, the Fair Market Rent (FMR) set by the government for fiscal year 2024 is $2610 per month. When annualized, this translates into an annual rent of $31,320. The median home value in the area is $740,705. Using these figures, the implied gross yield for a Section 8 tenant would be approximately 4.23%. This calculation is derived by dividing the annual rent by the median home value.
In contrast, the market rent for a similar two-bedroom property, as indicated by the Zillow Observed Rent Index (ZORI), stands at $2,636 per month. Annualizing this figure results in an annual rent of $31,632. When compared to the median home value, this yields an implied gross yield of about 4.27%. Thus, the market rent scenario offers a slightly higher gross yield over the Section 8 scenario, by a mere 0.04 percentage points.
Given the 36.5% renter density in ZIP 95405, it's important to note that while Section 8 can provide steady income, it also comes with certain administrative and compliance burdens. The N/A-day DOM (days on market) suggests that properties may sell quickly, but this does not directly translate to rental market dynamics. Therefore, while the gross yields are nearly identical, the market rent scenario is likely more realistic for most investors due to fewer regulatory constraints and the potential for higher rent increases over time.
To summarize, for ZIP 95405, the gross yield for a Section 8 tenant is approximately 4.23%, while the gross yield for a market rent tenant is about 4.27%. These figures provide a baseline for understanding the financial implications of choosing between Section 8 and market rent tenants in this area.
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.