is Section 3?
is a means by which HUD fosters local economic development, neighborhood
economic improvement, and individual self-sufficiency. Section 3
is the legal basis for providing jobs for residents and awarding
contracts to businesses in areas receiving certain types of HUD
Section 3 of the HUD Act of 1968, wherever HUD financial assistance
is expended for housing or community development, to the greatest
extent feasible, economic opportunities will be given to Section
3 residents and businesses in that area.
established the Section 3 policy to guarantee that the employment
and other economic opportunities created by Federal financial assistance
for housing and community development programs should, if possible,
be directed toward low- and very-low income persons, particularly
those who are recipients of government assistance for housing.
are Section 3 residents?
3 residents are:
Public housing residents
Low and very-low income persons who live in the metropolitan area
or non-metropolitan county where a HUD-assisted project for housing
or community development is located.
Low income is defined as 80% or below the median income of that
Very low income is defined as 50% or below the median income of
Median incomes can be found using the American
Fact Finder at
is a Section 3 business & what types of economic opportunities
are available under Section 3?
is at least 51 percent or more owned by Section 3 residents,
Whose permanent, full-time employees include persons, at least
30 percent of whom are currently Section 3 residents, or within
three years of the date of first employment with the business
concern were Section 3 residents, or
provides evidence of a commitment to subcontract in excess of
25 percent of the dollar award of all subcontracts to be awarded
to a Section 3 business concern.
will award the economic opportunities?
of HUD financial assistance and their contractors and subcontractors
are required to provide economic opportunities, to the greatest
extent possible, consistent with existing Federal, State, and local
laws and regulations.
receives priority under Section 3?
training and employment:
Persons in public and assisted housing
Persons in the area where the HUD financial assistance is expended
Participants in HUD Youthbuild programs
Businesses that meet the definition of a Section
3 business concern
can businesses find Section 3 residents to work for them?
can recruit in the neighborhood and public housing developments
to inform residents about available training and job opportunities.
Distributing flyers, posting signs, placing ads, and contacting
resident organizations and local community development and employment
agencies to locate potential workers are effective ways of acquiring
recipients, contractors and subcontractors required to provide long-term
employment opportunities, and not simply seasonal or temporary employment?
are required, to the greatest extent feasible, to provide all types
of employment opportunities to low and very low-income persons,
including seasonal and temporary employment, as well as long-term
goals are based on "new hires", which are defined as full-time
employees for permanent, temporary or seasonal employment opportunities.
and contractors are encouraged to provide long-term employment.
At least 30 percent of the permanent, full-time employees hired
should be Section 3 residents. After a Section 3 employee has been
employed for 3 years, the employee may no longer be counted as a
Section 3 employee to meet the 30 percent requirement. This requires
recipients to continue hiring Section 3 residents when employment
opportunities are available.
can businesses and low income persons find out more about Section
the Fair Housing and Equal Opportunity representative at your nearest
HUD Field Office or the HUD community Builder.
if it appears an entity is not complying with Section 3?
There is a complaint process. Section 3 residents, businesses, or
a representative for either may file complaints if they believe
a violation of Section 3 requirements has occurred where a HUD-funded
project is planned or underway. Complaints will be investigated;
if appropriate, voluntary resolutions will be sought. A complaint
that cannot be resolved voluntarily may result in an administrative
Will HUD require compliance?
HUD receives annual reports from recipients, monitors the performance
of contractors and investigates complaints. HUD examines employment
and contract records for evidence of actions taken to train and
employ Section 3 residents and to award contracts to Section 3 businesses.
can businesses or residents pursue an alleged violation of Section
can file a written complaint with the local
HUD Field Office or mail it to:
Assistant Secretary for Fair Housing and Equal Opportunity
Attn: Office of Economic Opportunity
U.S. Department of Housing and Urban Development
451 Seventh Street, S.W.,
Washington, D.C. 20410-2000
written complaint should contain:
to Economic Opportunities home page
Name and address of the person filing the complaint
Name and address of subject of complaint (HUD recipient, contractor
Description of acts or omissions in alleged violation of Section
Statement of corrective action sought i.e. training, employment