Section 3 Program
Section 3 of the Housing and Urban Development Act of 1968 recognizes that HUD funding typically results in projects/activities that generate new employment, training and contracting opportunities. When these opportunities are created, Section 3 requires that preference is provided to low- and very low-income residents of the local community (regardless of race and gender), and the businesses that substantially employ them, for new employment, training and contracting opportunities resulting from the HUD-funded project.
Dollar thresholds: contracts over $100,000 are required to comply with Section 3 requirements
Section 3 regulations do not require hiring or subcontracting unless it is necessary to the project
Section 3 is triggered when covered projects require “new hires” or subcontracting
Section 3 is not an entitlement; it is an opportunity for employment, training and contracting opportunities
For all contracts over $100,000 (this includes developer, contractor and subcontractor contracts):
30 percent of the aggregate number of new hires shall be Section 3 Residents
10 percent of all covered construction contracts shall be awarded to Section 3 Business Concerns
3 percent of all covered non-construction contracts shall be awarded to Section 3 Business Concerns
Efforts to meet these goals must be made to the greatest extent feasible and all efforts taken must be documented accordingly.
A public housing resident or an individual who resides in the metropolitan area or Non-metropolitan County in which the Section 3 covered assistance is expended and who is considered to be a low- (80% of AMI) to very low-income (50% of AMI) person. Persons must be certified as Section 3 Residents to count toward the goals listed above. Certification lasts for a period of 3 years.
51 percent or more of the business is owned by Section 3 Residents; or
30 percent of the business’s permanent, full-time employees are certified Section 3 Residents; or
The Business provides evidence that it will subcontract 25 percent of the dollars awarded to certify Section 3 Business Concerns.
Businesses must be certified as a Section 3 Business Concern to count towards the goals listed above.
Each entity undertaking work under a contract that is $100,000 or more must submit a Section 3 Plan. This plan must include, at a minimum, the General Statement, the Current Workforce Profile and Hiring Plan, Permanent Employee Listing, and reporting of Section 3 initiatives.
For information regarding Resident or Business Concern certification or Section 3 procedures, please contact Shannon Johnson, 513-352-6146 or firstname.lastname@example.org.