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Section 3 Compliance

​Helping recipients and contractors navigate Section 3 requirements—correctly, every time.​

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​​​​​​Section 3 of the HUD Act ensures that economic opportunities created by HUD-funded projects—especially jobs and contracts—benefit low-income individuals and the businesses that employ these persons within their community.

 

ARTOVIA brings deep expertise and extensive experience in HUD Section 3 compliance, taking a hands-on approach to help you navigate Section 3 with confidence. We don’t just advise—we actively help you build and implement a Section 3 program that meets HUD requirements and supports your project goals.

 

With a proven history of ensuring Section 3 compliance across a wide range of projects, our team delivers a full suite of ready-to-use policies, procedures, tools, and systems that can be quickly customized to fit your specific needs—saving time and ensuring compliance from day one.

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What Is Section 3?​​​​​​​​

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​​​Section 3 is a provision of the Housing and Urban Development Act of 1968. It requires recipients of certain HUD financial assistance—and their contractors and subcontractors—to provide employment, training, and contracting opportunities to:​​​

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  • Section 3 Workers – low-income individuals

  • Targeted Section 3 Workers – e.g., public housing residents, YouthBuild participants, or low-income individuals in the project area

  • Section 3 Business Concerns – businesses majority-owned by low-income individuals or that employ a substantial number of Section 3 workers​

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​​When Does Section 3 Apply?

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​​Housing and Community Development Section 3 Projects

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  • $200,000+ in HUD assistance (e.g., CDBG, HOME) (housing rehab, construction, and other public construction)

  • $100,000+ from Office of Lead Hazard Control and Healthy Homes (lead hazard control, healthy homes)

  • Compliance is tracked on a project-by-project basis

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Public Housing

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Section 3 applies to the following public housing financial assistance, in any amount:

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  • Public Housing Operating Funds (maintenance, salaries, utilities)

  • Capital Funds (modernization, repairs, energy upgrades)

  • Development Assistance (new construction, redevelopment)

  • Compliance is tracked across the PHA’s fiscal year​​​​​​​

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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Who Is Responsible for Section 3 Compliance?

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The following entities must ensure Section 3 compliance:

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  • Recipients (e.g., PHAs, grantees)

  • Prime Contractors

  • Subcontractors

 

To ensure adherence to Section 3 requirements, each party must independently fulfill the following obligations:

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  • Make Good Faith Efforts to Hire Section 3 and Targeted Section 3 Workers – Each entity must actively seek to recruit and employ individuals who meet Section 3 criteria.

  • Make efforts to award contracts to Section 3 Businesses – Entities are expected to prioritize contracting with businesses that qualify as Section 3.

  • Monitor Compliance Within Their Tier – Recipients must oversee the compliance of their contractors. Contractors must oversee the compliance of their subcontractors.​​​​​​​​​​​​​​

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What Are HUD Safe Harbor Benchmarks?

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To be considered compliant with HUD’s Section 3 requirements:

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  • 25% of total labor hours must be performed by Section 3 workers

  • 5% by Targeted Section 3 workers

 

If these benchmarks are not met, recipients and contractors must demonstrate prioritization of effort—actively seeking to provide employment and contracting opportunities to Section 3 workers and businesses through documented good-faith efforts.​​​​​​​​​​​​​​​​​​​​​​​​

​​How ARTOVIA Helps Ensure Compliance?

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Whether you're a recipient or a contractor, ARTOVIA simplifies your Section 3 compliance with our services.

 

How We Help Recipients

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We help you meet your Section 3 compliance obligations and monitor compliance, making it easier to manage responsibilities. Our services include developing customized compliance plans, training your team, managing registries, monitoring labor hours, and monitoring contractor and subcontractor compliance to keep you funding agency audit- and monitoring-ready. We also provide ongoing technical assistance throughout the project lifecycle.

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How We Help Contractors

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We support your company's Section 3 compliance efforts and help monitor subcontractors to ensure compliance. Our team aligns your internal processes with recipient plans, assists with outreach and documentation, and monitors labor hours. We also offer targeted training and on-demand technical guidance to help your staff implement compliance requirements effectively.

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By supporting your Section 3 compliance, we contribute to building stronger, more resilient communities.​​​​​​​

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Services​

  • Develop customized Section 3 Compliance Plans

  • Conduct compliance training sessions

  • Establish and manage Section 3 worker/business registries and certification programs

  • Assist with outreach for employment and contracting opportunities

  • Ensure Section 3 language is integrated into all project documents and contracts

  • Monitor and document compliance of recipients and contractors/subcontractors, including labor hours and good-faith efforts

  • Provide ongoing technical assistance

  • Maintain complete, fully compliant records, prepare required reports, support funding agency audits and monitoring, and assist with project closeout​

Avoid findings and penalties by meeting HUD’s Section 3 requirements with confidence

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