Location: Chico, CA | Metro: Chico, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,060 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $2,090 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
The economics of Section 8 housing in ZIP code 95940, which is located in Chico County, California, revolve around the SAFMR (Small Area Fair Market Rent) for a two-bedroom unit set at $1430 for fiscal year 2024. This SAFMR figure is specifically tailored for this ZIP code, meaning it reflects the rental rates unique to this area.
A landlord participating in the Section 8 program will receive a payment from the government towards the rent of their property, but this amount is not the entire rent. The voucher holder, typically a low-income tenant, is responsible for paying a portion of the rent themselves. This tenant contribution is based on their income and is generally around 30% of their adjusted monthly income. For instance, if a tenant's adjusted monthly income is $1000, they would be required to pay $300 towards the rent.
Beyond the tenant's contribution, the landlord also receives an additional amount from the housing authority to cover the remaining rent. However, this amount cannot exceed the SAFMR. If the total rent requested by the landlord exceeds $1430, the housing authority will only reimburse up to that limit. Therefore, the landlord's reimbursement is calculated as follows:
Total rent - Tenant contribution = Landlord's reimbursement before utilities
If Total rent > $1430, then Landlord's reimbursement = $1430 - Tenant contribution
In addition to the base rent, the housing authority provides utility allowances. These allowances vary depending on the type of utilities included in the rent. For a two-bedroom unit, the utility allowance can range from $200 to $400 per month, depending on the actual costs of utilities in the area.
To illustrate, let's assume a landlord charges $1600 for a two-bedroom unit. If the tenant's portion is $300, the government would pay the difference, but capped at the SAFMR of $1430. Thus, the government would pay $1130 ($1430 - $300), making the total reimbursement $1330 when including a utility allowance of $200.
This leaves a shortfall for the landlord, who charged $1600 but received only $1330. In this scenario, the landlord would have to absorb the remaining $270. Conversely, if the market rent for a two-bedroom unit in ZIP 95940 were lower than $1430, say $1200, the landlord would receive the full $1200 plus the utility allowance, resulting in a surplus for the landlord.
Given the SAFMR of $1430 and assuming a utility allowance of $300, landlords in ZIP 95940 should expect a reimbursement of $1730 for a two-bedroom unit. Since the local market rent is not available, it's impossible to determine the exact surplus or shortfall. However, if the market rent is below $1430, landlords will see a surplus; if above, they will face a shortfall.
Data Sources: FMR data from HUD (2027).
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.