Section 3 of the Housing & 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 the low- and very low-income residents of the local community (regardless of race & gender), and the businesses that substantially employ them, for new employment, training, and contracting opportunities resulting from the HUD-funded project.
Section 3 projects are those where HUD program assistance is used for housing rehabilitation, housing construction, and other public construction when the amount of assistance to the project exceeds a $200,000 or when funding from HUD’s Lead Hazard Control and Healthy Homes programs exceeds $100,000. HUD has recently made extensive changes to the Section 3 regulations. The Department of Community and Economic Development will continue to update and refine related policies and procedures as more information and guidance is issued by HUD.
For the project to meet HUD’s safe harbor conditions the contractor will need to demonstrate both of the following:
- PRIORITIZATION: Certifying the prioritization of effort for the following:
- Employment & Training
- Section 3 Workers in the HUD Defined Metropolitan Service Area
- YouthBuild participants in the MSA
- Section 3 Business Concerns in the MSA
- YouthBuild programs
- LABOR HOURS: Meeting or exceeding Section 3 benchmarks for total number of labor hours worked by:
- Section 3 Workers – 25% or more of total number of labor hours worked by all workers on the project.
- Targeted Section 3 Workers – 5% or more of total number of labor hours worked by all workers on the project.