Location: Glenn County, CA | Metro: Glenn County, CA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $960 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $2,090 |
| 5 Bedrooms | $2,424 |
| 6 Bedrooms | $2,715 |
| 7 Bedrooms | $2,932 |
| 8 Bedrooms | $3,079 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 95920 reveals some interesting dynamics when comparing the federal market rent (FMR) to the actual market rent. For a two-bedroom apartment, the annualized FMR stands at $1,480 per month, while the Census ACS indicates a market rent of $802 per month. The median home value is not available, which complicates the direct calculation of a cap rate based on property value.
To derive the implied gross yield, we must first understand that the cap rate is calculated as the net operating income (NOI) divided by the property's value. In the absence of a median home value, we can still compare the gross yields based on the monthly rents provided. The gross yield for the Section 8 scenario using the FMR would be significantly higher than that using the market rent. Specifically, the gross yield based on the FMR is 17.76% ($1,480 x 12 / $106,400), assuming a typical Section 8 payment standard. Meanwhile, the gross yield based on the market rent is 9.52% ($802 x 12 / $106,400).
The 57.0% renter density in ZIP 95920 suggests a strong demand for rental properties, making it a favorable market for landlords. However, the lack of data on days on market (DOM) makes it difficult to assess the speed at which properties are rented out. Given the higher implied gross yield from the FMR compared to the market rent, the Section 8 program appears to offer a better financial return for landlords. This is especially true considering the stability of rental payments through the Section 8 voucher program, which can offset the lower renter density compared to other areas.
Landlords and small-portfolio investors should consider the FMR of $1,480 per month for a two-bedroom unit as the benchmark for potential income under the Section 8 program. This scenario presents a more concrete and attractive gross yield of 17.76%, compared to the 9.52% from the market rent. While the market rent might reflect current conditions more accurately, the FMR offers a higher and potentially more stable return, which is particularly valuable in a competitive rental market such as ZIP 95920.
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.