Section 3 Compliance

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

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—ensuring compliance from day one.

What Is Section 3?

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 make employment, training, and contracting opportunities available, to the greatest extent feasible, to:

Section 3 Workers – individuals who are low-income, employed by a Section 3 business, or a YouthBuild participant
Targeted Section 3 Workers – e.g., public housing or Section 8 residents, YouthBuild participants, low-income individuals near HCD-funded projects, or those employed by a Section 3 Business Concern. Eligibility varies based on HUD funding source
Section 3 Business Concerns – companies that are either mostly owned by low-income individuals, owned by public housing or Section 8 residents, or have most of their recent labor hours performed by Section 3 workers

When Does Section 3 Apply?

Housing and Community Development (HCD) Financial Assistance Projects

$200,000+ in HUD assistance (housing rehab, construction, and other public construction) (CDBG, HOME, etc.)
Compliance is tracked on a project-by-project basis

Lead Hazard Control and Health Homes (LHCHH) Programs

$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

Public Housing

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

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

Who Is Responsible for Section 3 Compliance?

The following entities must ensure Section 3 compliance:

Recipients (e.g., PHAs, grantees)
Prime Contractors
Subcontractors

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

Include Section 3 Provisions in Procurement Documents, Contracts and Subcontracts – Each party is responsible for ensuring that HUD-compliant Section 3 language is incorporated into all procurement documents, prime contracts, and subcontracts. Provisions must clearly state Section 3 obligations and flow down to all lower-tier entities.
Economic Opportunities for Section 3 and Targeted Section 3 Workers –Each entity must, to the greatest extent feasible, direct employment and training opportunities to individuals who meet HUD’s definition of Section 3 Workers and Targeted Section 3 Workers, and must prioritize these opportunities in accordance with Section 3 requirements.
Contracting with Section 3 Businesses – Entities, must to the greatest extent feasible, award contracting opportunities to Section 3 business concerns and must prioritize these opportunities in accordance with Section 3 requirements.
Meet HUD Safe Harbor Benchmarks – Entities are expected to meet HUD Safe Harbor Benchmarks.
Monitor Compliance Within Their Tier – Recipients must oversee the compliance of their contractors. Contractors must oversee the compliance of their subcontractors.
Maintain records that comply with Section 3 requirements.

What Are HUD Safe Harbor Benchmarks?

In order to meet HUD’s Section 3 benchmarks:

25% of total labor hours must be performed by Section 3 workers
5% must be performed by Targeted Section 3 workers

All parties must certify they will make — and have made — best efforts to provide employment, training and contracting opportunities to Section 3 workers and businesses in the priority order outlined in HUD’s regulations.

If benchmarks are not met, recipients, contractors, and subcontractors must document their qualitative efforts to comply.

How ARTOVIA Helps Ensure Compliance?

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

How We Help Recipients

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, verifying inclusion of Section 3 language in contracts and subcontracts, 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.

How We Help Contractors

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, verifies that Section 3 language is included in all subcontractor agreements, monitors labor hours and helps with record-keeping.

We also offer targeted training and on-demand technical guidance to help your staff implement compliance requirements effectively. ARTOVIA helps Section 3 Contractors obtain and maintain certification through expert guidance, documentation support, and ongoing compliance assistance.

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

Services

Develop customized Section 3 Compliance Plans
Conduct compliance training sessions
Establish and manage Section 3 worker/business registries and certification programs
Assist with Section 3 business certifications
Assist with outreach for employment and contracting opportunities
Ensure Section 3 language is integrated into all procurement 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