What is Section 3?
Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968 that helps foster local economic development, neighborhood economic improvement, and individual self-sufficiency. The Section 3 program requires that recipients of certain HUD financial assistance, to the greatest extent feasible, provide job training, employment, and contracting opportunities for low- or very-low income residents in connection with projects and activities in their neighborhoods.
How does Section 3 promote self- sufficiency?
Section 3 is a starting point to obtain job training, employment and contracting opportunities. From this integral foundation coupled with other resources comes the opportunity for economic advancement and self-sufficiency.
• Federal, state and local programs
• Advocacy groups
• Community and faith-based organizations
Who are Section 3 residents?
Section 3 residents are:
• Public housing residents or
• Persons who live in the area where a HUD-assisted project is located and who have a household income that falls below HUD’s income limits.
Determining Income Levels
• Low income is defined as 80% or below the median income of that area.
• Very low income is defined as 50% or below the median income of that area. What is a Section 3 business concern?
A business that:
- Is 51 percent or more owned by Section 3 residents;
- Employs Section 3 residents for at least 30 percent of its full-time, permanent staff; or
- Provides evidence of a commitment to subcontract to Section 3 business concerns, 25 percent or more of the dollar amount of the awarded contract. What programs are covered? Section 3 applies to HUD-funded Public and Indian Housing assistance for development, operating, and modernization expenditures. Section 3 also applies to certain HUD-funded Housing and Community Development projects that complete housing rehabilitation, housing construction, and other public construction.