Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968 that is intended to 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- and very-low-income residents in connection with projects and activities in their neighborhoods.
Section 3 “preference” requirements are triggered by the need for new hires (whether individual employees, contractors or subcontractors) for work on a project using funding from HUD (or any federal agency) covered by Section 3 legislation. This includes all public housing funds received from HUD as well as CDBG and HOME funded projects.
Section 3 residents are:
The HUD income limits as of 2011 for the Chicago-Joliet-Naperville metropolitan statistical area are as follows:
Will Co. Income Limits 2016 |
1 Person |
2 Person |
3 Person |
4 Person |
5 Person |
6 Person |
7 Person |
8 Person |
$43,050 | $49,200 | $55,350 | $61,500 | $66,450 | $71,350 | $46,300 | $81,200 |
A business that:
A new hire means a full-time employee for a new permanent, temporary or seasonal position that is created during the expenditure of Section 3 covered financial assistance.
The Housing Authority of Joliet has outlined the following order of preference for meeting the Section 3 employment and training goals when utilizing Public and Indian Housing (PIH) funding:
* Preference will be given to residents enrolled in Family Self-Sufficiency and Step Up Training programs
You may qualify as a Section 3 business based on company ownership or workforce composition.
(a) Ownership: Review your company ownership to determine if the company is at least 51% owned by Section 3 residents.
(b) Workforce composition: Review your current payroll data to determine if you employ a workforce of at least 30% workers who live in low-income households. Any current employee who lives within Will County and who lives in a household with an income level below the low-income limits listed in the table is eligible to be counted as a Section 3 resident and employee. Employers should have all employees complete the Section self-certification form in order to determine if the business is eligible for Section 3 certification.
Section 3 is both race and gender neutral. This means that neither race nor gender are considered when determining if an individual is a Section 3 resident. The preferences provided under this regulation are based on income level and location. The Section 3 regulations were designed to encourage recipients of HUD funding to direct new employment and contracting opportunities to low-income residents, and the businesses that employ these persons, within their community regardless of race and/or gender.
Contractors and subcontractors must still comply with the labor standards provisions of 29 CFR Parts 3 and 5, also known as the Davis-Bacon and Related Acts, including the prevailing wage, reporting requirements, apprentice and trainee standards and overtime provisions.
Since ARRA funding is specifically intended to create jobs and other economic opportunities for those most impacted by the recession, compliance with the requirements of Section 3 is critical.
ARRA does not increase or reduce each recipient’s Section 3 responsibilities. In fact, the requirements of Section 3 apply in the same manner as they do for other types of covered HUD financial assistance. Specifically, grantees and other direct recipients of Section 3 covered ARRA funding are required to comply with the statutory and regulatory requirements of Section 3.
No. Section 3 residents must demonstrate that they meet the qualifications for new employment opportunities created as a result of the expenditure of the covered assistance (i.e., the construction of a HOPE VI-funded project).
Section 3 business concerns must submit evidence to the satisfaction of the party awarding the contract (Housing Authority of general contractor) to demonstrate that they are responsible firms and have the ability to perform successfully under the terms and condition of the proposed contract.
Recipients and contractors are required, to the GREATEST extent feasible, to direct all employment opportunities to low- and very low-income persons – including seasonal and temporary employment opportunities.
Recipients and contractors are encouraged to provide long-term employment. They may count a Section 3 resident employee for three years to meet the business criterion that at least 30 percent of the permanent, full-time employees are Section 3 residents.
Where can I get technical assistance for questions related to Section 3 activities or reporting requirements?
Recipients and contractors can contact Lisa Johnson, Section 3 Coordinator, at 815-823-8400 or via email by clicking here.