Navigating Section 8 Investments in Los Angeles: Understanding SAFMR's Impact on Real Estate Portfolios

Los Angeles has recently implemented significant changes affecting Section 8 tenants and rent structures across different areas. Los Angeles and Los Angeles County have adopted the Small Area Fair Market Rents (SAFMR) system. Under SAFMR, Section 8 voucher values are determined based on ZIP codes rather than a citywide average. This approach allows voucher holders to access housing in higher-cost neighborhoods by aligning voucher amounts with local market rates.

What Are Voucher Payment Standards (VPS)?

Voucher Payment Standards are the maximum amounts that housing authorities will pay to help families with rent under the Section 8 Housing Choice Voucher Program. These standards are based on local housing costs and vary depending on the area and the size of the rental unit. The housing authority uses these standards to determine how much rent assistance a family receives, ensuring that the subsidy aligns with local market rates. 

For instance, as of January 1, 2025, the VPS for a 2-bedroom unit in ZIP code 90024 (Westwood) is $3,438, while in ZIP code 90003 (South Los Angeles), it's $2,061.

To view the most recent VPS for specific ZIP codes and unit sizes: ceslosangeles.weebly.com

• HACLA: Visit their Payment Standards page for detailed information. LA Housing Authority+2LA Housing Authority+2LA Housing Authority+2

• LACDA: Refer to their Payment Standards schedule effective January 1, 2025. LACDA+3LACDA+3LACDA+3

  
  

What This Means for Investors

If you're someone who uses Section 8 and base your business model around it, you should purchase in a higher tier in order to get higher rent. By knowing what zip codes are in which tier, I can create an MLS auto alert, notifying which properties fit your criteria and align to your goals. Contact me to get started!