By Lacia Sommars, Section 3 Program Analyst, U.S. Department of Housing and Urban Development, Office of Field Policy and Management

According to the Bureau of Labor Statistics, there were over 7 million persons unemployed in America as of September 2021. Throughout the pandemic, we have seen the unemployment rates rise and fall as businesses have tried to navigate the pandemic and workers have struggled to find jobs with adequate wages and safe conditions, while also balancing the needs of their families at home. Connecting qualified workers and businesses to economic opportunities has never been an easy task. Now more than ever we need to leverage opportunities and partnerships to be able to connect the unemployed, especially those low- or very low-income individuals facing housing insecurity, to economic opportunities that could change everything for them. One substantial way in which workforce boards can impact their clients’ economic outcomes is by connecting those that qualify as Section 3 workers and Section 3 businesses to the opportunities generated by projects funded by the U.S. Department of Housing and Urban Development (HUD).

What is Section 3?

Section 3 is a provision of the Housing and Urban Development Act of 1968, passed to ensure that employment and other economic opportunities generated by certain HUD financial assistance shall, to the greatest extent feasible, and consistent with existing Federal, State, and local laws and regulations, be directed to low- and very low-income persons. This includes a particular focus on those who are recipients of government assistance for housing and business concerns which provide economic opportunities to low- and very low-income persons. In simpler terms, Section 3 is a regulation which requires grant recipients to utilize workers from public housing and low-income communities to make up a portion of the labor used on a HUD-funded project. For example, if a city has received a grant from HUD for $10 million to build new affordable housing, 25% of the labor used to execute the project should come from public housing residents, low-or very low-income workers, or workers that live near the worksite.

How Can Workforce Boards Take Advantage of This for Their Clients?

Section 3 opportunities generated by HUD-funded projects mean opportunity for workers as well as businesses. Workforce boards can direct their business clients to the Business Registry where they can self-certify if they meet the criteria for being a Section 3 business and then register as such. Workforce boards can direct both worker and business clients to the Opportunity Portal where workers can search for jobs and businesses can post jobs and search for contract opportunities.

Many workforce boards already have strong relationships in place with housing authorities as they frequently ask clients about their housing security and connect them to housing resources. By expanding these partnerships to include Section 3 opportunities, boards and housing authorities can mutually benefit from shared awareness of economic opportunities for their beneficiaries and target audiences. Workforce boards can also connect with local HUD offices to provide training and resources to their workers, businesses, or workforce board staff.

Impact Moving Forward

While Section 3 has been in place since 1968, over time it became clear the regulation needed to be changed for it to be truly impactful for workers and create more opportunities for businesses. HUD made changes to the Section 3 Regulation and published the new final rule on September 29, 2020, with the rule going into full effect as of July 1, 2021. This new rule and its intended impact moving forward is focused on long term, sustainable career development as well as an increased effort around outreach, engagement with stakeholders, and worker empowerment. By collaborating with your local HUD offices and housing providers, workforce boards will play an essential role in boosting economic opportunity to their clients and improving the economic conditions of public housing residents, low-or very low-income persons, and businesses.

Source: Bureau of Labor Statistics (The Employment Situation, 2021)

https://www.bls.gov/news.release/pdf/empsit.pdf

See below infographic provided: WHAT is Section 3?