WASHINGTON– U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro announced new changes to strengthen a federal program called “Section 3” that directs jobs and training to low-income workers and connects businesses that hire them with HUD-funded contracting opportunities. The initiative would increase opportunities for businesses that hire local public housing residents for HUD-funded projects. In addition to changes to Section 3 requirements, Secretary Castro also announced the launch of a National Section 3 Business Registry. The registry is a searchable online database that local housing authorities, government agencies, and contractors can use to find firms that are self-certified as employing at least 30 percent public housing residents or low-income workers.
“All Americans should have the chance to contribute to the development and growth of their own communities,” said HUD Secretary Julián Castro. “These Section 3 initiatives will connect more hard-working folks and small businesses to local economic opportunities, giving them new tools to secure a more prosperous future.”
Every year, HUD funds create thousands of jobs across the country that range from construction to professional services like accounting or engineering. From 2009-2014, based on data reported by public housing authorities and HUD modeling, approximately 170,000 jobs were created by HUD for eligible low-income workers through this program.More than $5 billion in HUD-funded contracts has been directed to Section 3 businesses since 2009. While businesses are only required to hire 30 percent low-income workers, that goal has been exceeded nationally. About 50 percent of new hires for HUD-funded contracts are low-income workers or public housing residents.
Section 3 of the Housing and Urban Development Act of 1968 states that, “employment and other economic opportunities generated by Federal financial assistance for housing and community development programs shall, to the greatest extent feasible, be directed toward low- and very low-income persons, particularly those who are recipients of government assistance for housing, and to businesses that employ them.” Since 1994, the Section 3 program has been governed by an interim regulation. For the first time in 20 years, HUD is proposing a new rule today that would expand opportunities for public housing residents and low-income workers.
In 2012, HUD launched a five-city pilot Section 3 Business Registry in Detroit, Los Angeles, Miami, New Orleans and Washington, DC to help local public agencies better connect local businesses that hire low-income residents and workers with the contracting and economic development opportunities created by HUD-funded housing and development projects, something that is required under Section 3 guidelines. Nearly 1,000 businesses have signed up for the registry nationally. Today, in Miami, Secretary Castro applauded the nearly 300 Section 3 businesses that have signed up for the registry statewide. HUD announced that the initiative will now become national.
In addition, the proposed rule announced today would recognize new HUD programs established since 1994 that are required to meet low-income and public housing resident hiring goals. It also clarifies vague language in the interim rule and eases challenges to achieving compliance. HUD is currently accepting feedback on the proposed rule during a 60-day public comment period.