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NYC Department of Housing Preservation & Development
Developers

HUD Section 3

PURPOSE

Section 3 of the Housing and Urban Development Act of 1968, as amended by the Housing and Community Development Act of 1992, requires that recipients of financial assistance provided by the U.S. Department of Housing & Urban Development ("HUD"), including developers, owners, contractors and their subcontractors provide, "to the greatest extent feasible", training and employment opportunities for low income area residents and contract opportunities for the performance of work by local businesses owned by and/or employing low income residents.


APPLICABILITY 

HUD requires HPD to collect information on every Sponsor, Contractor, Sub-Contractor, etc. that receives a contract or loan agreement, funded entirely or in part, by federal funds in excess of $100,000, to insure compliance with Section 3 regulations.  Section 3 applies to contracts for professional services and for construction work. For more information on Section 3, including contractor responsibilities and definitions, please review the following: “What is Section 3?”


SECTION 3 RESIDENTS

Section 3 residents are those individuals living in New York City who are EITHER residents of NYCHA housing OR whose median household income (varies by household size) is 80% or less of the area median income.  In New York City, the maximum income for each household size is shown in this chart:

 

# of Persons in Household

Gross Household income Max.

1 person

$48,101

2 persons

$55,001

3 persons

$61,851

4 persons

$68,701

5 persons

$74,201

6 persons

$79,701

7 persons

$85,201

8 persons

$90,701

 


  SECTION 3 REPORTING RESPONSIBLITIES: EMPLOYMENT/TRAINING

Sponsors, contractors and subcontractors must complete Form S3-NHR,”“Employee Self-Affirmation Form for Contractors and Subcontractors Subject to Section 3" to document all new hires and to indicate whether Section 3 residents were hired to fill any available positions.  Use the definition of Section 3 Residents found above as a guide for determining the status of all new employees.  Those entities that have direct agreements with HPD – sponsors or contractors - regarding a Section 3 Project are responsible for collecting Section 3 New Hire Reports from their contractors, subcontractors, consultants, etc. 

Sponsors, contractors and subcontractors must complete “Employee Self-Affirmation Form for Contractors and Subcontractors" to document all new hires and to indicate whether Section 3 residents were hired to fill any available positions. A Section 3 employee is either:

  •  An employee who is currently a Section 3 resident; or
  •  An employee who was hired within the past three years, was a Section 3 resident upon hire, but whose household income/housing status no longer qualifies him/her as a Section 3 resident.  Employers may claim credit for these positions for three years after this individual’s date of hire.

Those entities that have direct agreements with HPD – sponsors or contractors - regarding a Section 3 Project are responsible for collecting Section 3 New Hire Reports from their contractors, subcontractors, consultants, etc.” 


FINDING QUALIFIED SECTION 3 RESIDENTS

HPD has developed relationships with construction employment and training agencies that offer formal training, job readiness and pre-screening programs.  These agencies will help your firm to find qualified candidates for any construction trade or management related job opportunities that may arise.  Our current list is available here: Section 3 Employment Referral List


SECTION 3 BUSINESS CONCERN

Section 3 regulations define Section 3 Business Concern in one of three ways:

The business is at least 51 percent or more owned and managed by Section 3 residents;
The permanent, full-time employees of the business include persons, at least 30 percent of whom are Section 3 residents, or within three years of the date of first employment with the business concern were Section 3 residents
The business documents subcontracting at least 25% of its contract award to firms meeting one of the two Section 3 Business Concerns definitions above.
 

 The construction and professional services firms on the list below have met one of the two criteria for certification as Section 3 Business Concerns.
"Section 3 HPD Directory of Business Concerns"


 CERTIFICATION

HPD has developed a certification program for businesses seeking recognition as a Section 3 Business Concern.  Certified firms will be included in our online directory of Section 3 Business Concerns and will receive information, counseling and invitations regarding business opportunities from HPD and the New York City Department of Small Business Services.  To be considered for certification, firms should complete and submit to the agency as per the instructions found therein:

"Section 3 Business Certification Packet” 


SECTION 3 CONTRACTOR RESPONSIBILITIES

Each Sponsor or Contractor signatory to an agreement or contract covered by Section 3 must complete Form S3-C - “Section 3 Project Summary”, which documents all contracting and subcontracting activity for each quarterly period during the life of the project and indicates whether Section 3 Business Concerns were awarded contracts.  Utilize the directory of Section 3 Business Concerns to determine the Section 3 status of all business entities. 

Form S3-C - “Section 3 Project Summary Form”


BUILD IT BACK SECTION 3 OLIGATIONS

The Build It Back Program is being funded with Federal Community Development Block Grant-Disaster Recovery (CDBG-DR) funds that the City receives from the U.S. Department of Housing and Urban Development (HUD).  These funds are subject to Section 3 of the Housing and Urban Development Act of 1968.  Build It Back Program recipients are mandated by the Section 3 provision found in their contracts to provide job training, employment, and contracting opportunities for low- or moderate-income residents. The following package contains guidance and forms for use by Build It Back recipients in compliance with HUD regulations:

Community Development Block Grant-Disaster Recovery - Section 3 Package for
Contractors
(PDF) 

 

 

 




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