Section 3 Compliance

Section  3 is a provision of the Housing and Urban Development Act of 1968. The  purpose of Section 3 is to ensure that economic opportunities, most  importantly employment, generated by certain HUD financial assistance  shall be directed to low- and very low-income persons, particularly  those who are recipients of government assistance for housing or  residents of the community in which the Federal assistance is spent.

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The  requirements of Section 3 apply to all programs receiving public  housing financial assistance regardless of the amount of assistance  received from HUD. Section 3 also applies to projects with more than  $200,000 in funding from housing and community development financial  assistance programs. The threshold is $100,000 when the assistance is  from the Lead Hazard Control and Healthy Homes programs, as authorized  by Sections 501 or 502 of the Housing and Urban Development Act of 1970,  the Lead-Based Paint Poisoning Prevention Act, and the Residential  Lead-Based Paint Hazard Reduction Act of 1992.

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Recipients  of Section 3 covered funding, and their contractors and subcontractors  must undertake efforts, to the greatest extent feasible, to provide  employment and training opportunities arising from the project to  Section 3 and Targeted Section 3 Workers and to provide contracting  opportunities arising from the project to Section 3 Business Concerns.  In order to meet Section 3 Safe Harbor, they must meet the Section 3  benchmark goals for labor hours worked and required prioritization of  efforts for employment, training and contracting.

We  help recipients develop Section 3 provisions and language to include in  their project specifications and contracts with prime contractors for  Section 3 covered construction projects. During construction, we then  help the recipient assess contractor hiring and subcontracting needs,  and monitor the compliance of the prime contractor and all  subcontractors with those provisions. We also help with all needed  record keeping and reporting.

If  the contractors and subcontractors don’t meet the benchmark goals and  requirements, they are required to submit the qualitative efforts they  have performed. We help the recipients evaluate the efforts they have  made and determine further enforcement action that may be required.

We  can help recipients and subrecipients develop Section 3 policies and  procedures and undertake their own efforts for Section 3 compliance. We  also assist recipients with all aspects of record keeping and reporting.

We  are experts on the new HUD Section 3 regulations and can quickly bring  recipients up to speed with them to help ensure compliance.​

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We  work with all types of Section 3 covered projects that are funded from a  variety of federal sources such as Community Development Block Grant  (CDBG), HOME Investment Partnership Program, Lead Hazard Control Grants  and Public Housing Programs, as well as other programs.