What is Section 3?
Section 3 is a provision of the Housing and Urban Development Act of 1968. The purpose of Section 3 to ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State and local laws and regulations, be directed to low-and very low income persons, particularly those who are recipients of government assistance for housing, and to business concerns which provide economic opportunities to low- and very low-income persons.
What kinds of economic opportunities?
- Job training
What does the term “Section 3 resident” mean?
A “section 3 resident” is: 1) a public housing resident; or 2) a low- or very low-income person residing in the metropolitan area or non-metropolitan county where the Section 3 covered assistance is extended.
What is a Section 3 business concern?
Section 3 business concerns are businesses that can provide evidence that they meet one of the following criteria:
- 51 percent or more owned by Section 3 residents; or
- At least 30 percent of its full time employees include persons that are currently Section 3 residents, or were residents within three years of the date of first hire or
- Provides evidence, as required, of a commitment to subcontract in excess of 25 percent of the dollar award of all subcontracts to business concerns that meet one of the first two qualifications above.
How does Section 3 differ from the Minority Business Enterprise/Women Business Enterprise programs?
Section 3 is both race and gender neutral. The preferences provided under this regulation are based on income-level and location. Section 3 regulations were designed to encourage recipients of HUD funding to direct new employment, training, and contracting opportunities to low-income residents, and the businesses that employ these persons, within their community regardless of race and/or gender.
Who is considered a recipient of Section 3 funding?
A recipient is any entity which receives Section 3 covered assistance, directly from HUD or from another recipient (i.e., a PHA; unit of State or local government; property owner; developer; etc). It does not include contractors or any intended beneficiary under the HUD program to which Section 3 Applies, such as a homeowner or a Section 3 resident.
What is a Section 3 covered project?
A Section 3 covered project involves the construction or rehabilitation of housing (including reduction of lead-based paint hazards), or other public construction such as street repair, sewage line repair or installation, updates to building facades, etc.
Who receives priority under Section 3?
For training and employment:
- Persons in public and assisted housing;
- Persons in the neighborhood;
- Participants in HUD Youthbuild programs;
- Homeless persons
How are “low-income” and very low-income determined?
Low-and very-low-household income limits are determined annually by HUD. These limits are typically established at 80 percent and 50 percent of the median income for each locality by household size or the number of people residing in one house. HUD income limits may be obtained from: http://www.huduser.org/portal/datasets/il.html