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. Section 3 ensures that recipients of certain HUD financial assistance, to the greatest extent feasible, provide employment and other economic opportunities for low- and very-low income persons in connection with projects and activities in their neighborhoods and to business concerns which provide economic opportunities to low- and very-low income persons.

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
• GDPM Self-Sufficiency Programs
• Community Partnerships

Who are Section 3 Residents?

A Section 3 Worker is any worker who currently fits, or when hired within the past five years fit, at least one of the below categories, as documented:

• A low or very low-income resident (Worker’s income for the previous or annualized calendar year is below the income limit established by HUD); or
• Employed by a Section 3 business concern; or
• A Youthbuild participant.

A Targeted Section 3 Worker is a Section 3 worker who:

• Is employed by a Section 3 business concern; or
• Currently fits or when hired fit at least one of the below categories as documented within the past five years:

• • A resident of public housing or Section 8-assisted housing; or
  • A resident of other public housing projects or Section 8-assisted housing managed by a PHA that is providing the assistance; or
  • A Youthbuild participant.

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 documented within the last six-month period is:

• 51% or more owned and controlled by low or very low-income persons; or
• 75% or more of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or
• 51% or more owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

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.