NLIHC submitted comments regarding HUD’s proposed changes to the Section 3 regulations. NLIHC commended HUD for updating and clarifying the current regulations, specifically endorsing several provisions while offering recommendations to further strengthen the final rule. NLIHC also signed on to an expanded letter submitted by the Housing Justice Network, a group of legal services attorneys and other advocates.
On March 27, HUD published the long-anticipated amendments to the 1994 interim Section 3 regulations (see Memo, 3/31). HUD states in the preamble to the proposed rule that the experience with Section 3 since 1994 revealed features of the interim rule that could be modified to improve effectiveness, and that efforts since 2009 to improve Section 3 oversight without changing the regulations “have not been as successful as HUD hoped.”
The purpose of Section 3 of the Housing and Urban Development Act of 1968 is to ensure that when HUD assists housing and community development projects, preference for some of the new jobs, training, and contracting opportunities that are created go to low income people and to the businesses owned by them or that hire them “to the greatest extent feasible.”
NLIHC supports eliminating the $100,000 threshold for triggering a contractor’s or subcontractor’s obligation to comply with Section 3. NLIHC accepts increasing from $200,000 to $400,000 the threshold triggering a city, county, or state’s obligation to comply, while urging HUD not to raise the threshold to $1 million. NLIHC also endorses requiring all recipients, including public housing agencies, to develop and adopt official policies and procedures to implement the requirements of Section 3.
NLIHC recommends that the order of priority for providing employment and training focus on public housing residents, voucher residents, and residents of privately owned properties assisted with Section 8 project-based rental assistance, by adding three priority provisions for housing and community development activities and one for public housing activities.
NLIHC recommends that HUD no longer use “new hires” as an indicator of compliance. Rather, compliance should be assessed based on the number of hours worked by Section 3 residents as a percentage of total hours worked by all employees for each job category. In other words, if the minimum Section 3 goal is 30%, then the total hours worked by Section 3 residents for each job category should comprise at least 30% of the total number of hours worked by all employees in each job category. If HUD insists on keeping “new hires,” then NLIHC recommends increasing the average number hours worked for a job category for which the Section 3 resident was hired from 50% to 100%.
NLIHC’s comment letter is at http://nlihc.org/sites/default/files/NLIHC_Comments-Proposed-Section3-Rule_052615.pdf
The Housing Justice Network comment letter is at http://nlihc.org/sites/default/files/HJN_Comments-on-proposed-Section3-regs_052615.pdf.
A more detailed explanation of the key provisions is at http://nlihc.org/sites/default/files/Section3_Summary_0515.pdf.
The proposed rule is at http://www.gpo.gov/fdsys/pkg/FR-2015-03-27/pdf/2015-06544.pdf
More information about Section 3 is on page 7-22 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/AG_2015_FINAL.pdf