Location: Trinity County, CA | Metro: Humboldt County, CA
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 | $1,160 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,610 | $317,070 | 0.51% | F |
| 3BR | $2,230 | $387,063 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 95542, Redway, CA, reveals an interesting dynamic between federally set Fair Market Rents (FMRs) and actual market rents. For a two-bedroom property, the annualized FMR for FY 2026 stands at $19,800 ($1,650 monthly), while the Census ACS indicates a market rent of $15,984 ($1,332 monthly).
To derive the gross yield, we'll use the median home value of $343,643. The gross yield based on the FMR would be approximately 5.76%, calculated as follows: $19,800 / $343,643 = 0.0576. In contrast, the gross yield using the market rent is significantly lower, around 4.65%, computed by: $15,984 / $343,643 = 0.0465.
The disparity between these two yields highlights the potential financial impact of participating in the Section 8 program versus renting at market rates. However, the decision to enter the Section 8 program should also consider the local rental market dynamics. With a renter density of 33.4%, the competition for tenants is moderate, suggesting that landlords can maintain occupancy levels relatively easily. The N/A-day DOM (days on market) indicates incomplete data, which could mean that properties in this area are either quickly rented or have unique characteristics affecting their marketability.
In light of the 33.4% renter density, the Section 8 scenario with a gross yield of 5.76% appears more realistic. This higher yield compensates for the lower vacancy risk associated with the Section 8 program. While the market rent scenario offers a lower gross yield of 4.65%, it may come with higher vacancy risks and greater administrative complexity in managing market-rate tenants.
Investors should weigh these factors carefully. A stable income stream with a slightly higher yield through Section 8 might be preferable over the potentially higher administrative burden and riskier income associated with market-rate rentals. The choice ultimately depends on individual investment goals and risk tolerance.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.