Section 3

Section 3 Overview

(HUD) Act of 1968, as amended (12 U.S.C. 1701 u). Section 3 stipulates that wherever HUD financial assistance is given for housing or community development - to the greatest extend feasible - economic opportunities will be give to residents and businesses in that area.

Section 3 is the legal basis for providing jobs to residents and awarding contracts to businesses in areas receiving certain types of HUD financial assistance.

A Section 3 covered contract means acontract or subcontract (including a professional service contract) awarded to a recipient or contractor for work generated by the expenditure of Section 3 covered assistance, or for work arising in connection with a Section 3 covered project.

A Section 3 covered project means the construction, reconstruction, conversion or rehabilitation of housing (including reduction and abatement of lead-based paint hazards). A Section 3 covered project may also include other public construction that involves building or improvements (regardless of ownership) that are financed by housing or community development assistance. A Section 3 covered project does not include routine maintenance repair and replacement.

A Section 3 business is a business that is

- 51% owned by Section 3 residents (this includes public housing residents or other low income individuals); or

- is staffed by at least 30% of employees who are Section 3 public housing residents and/or other Section 3 low- to very low-income individuals in full-time positions; or

- is subcontracted with a business in excess of 25% of the total dollar awarded to business concerns that meet the qualifications set forth in the two paragraphs above in this definition of a Section 3 business.

Businesses can find Section 3 residents to work for them by recruiting in public housing communities, and their surrounding neighborhoods, to inform individuals about available training and job opportunities. Other examples of effective ways to bring jobs and people together: distributing flyers, posting signs, placing ads, and contacting resident organizations/local community development/employment agencies to find potential workers.

To learn more about GDPM's Section 3 practices please review:

GDPM Section 3 Economic Opportunity Policy