Location: Chico, CA | Metro: Chico, 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 | $1,040 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,470 | $207,446 | 0.71% | D |
| 3BR | $2,040 | $285,064 | 0.72% | D |
U.S. Census Bureau data (2024)
With a Fair Market Rent (FMR) set at $1120 for ZIP 95968 in fiscal year 2024, landlords can confidently structure their rental agreements knowing they align with HUD guidelines. The actual market rent reported by the Census ACS stands at $1,156, indicating that properties priced slightly above the FMR remain competitive. Given the median home value of $260,248, it's clear that Palermo, CA offers a solid investment base for those looking to purchase property. With 48.8% of residents being renters, there is a substantial demand for rental housing, which benefits both landlords and small-portfolio investors. The median income of $42,000 suggests that many tenants will require financial assistance, making Section 8 vouchers a key component of the local rental market. While the days on market (DOM) and price-cut share data are unavailable, the high renter share and alignment between FMR and market rent indicate a steady demand for affordable housing options. Landlords who offer well-maintained units at or near the FMR will likely attract stable tenants. Small-portfolio investors should consider the potential for long-term occupancy rates, given the significant portion of residents relying on rental housing. In conclusion, the robust tenant demand and reasonable alignment between market rents and FMRs make Section 8 participation a viable strategy for maximizing occupancy and ensuring steady cash flow.
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.