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NYC Department of Housing Preservation & Development

HUD Section 3


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.


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 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


2 persons


3 persons


4 persons


5 persons


6 persons


7 persons


8 persons




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


Workforce1 is a service provided by the NYC Department of Small Business Services that prepares and connects qualified candidates to job opportunities in New York City. Workforce1 makes strong matches for both candidates and employers by using a unique combination of recruitment expertise, industry knowledge, and skill-building workshops to strengthen candidates’ employment prospects. Account Managers save businesses time and money by recruiting and screening jobseekers from a citywide pool of thousands of candidates and referring the most qualified to them. Select the following link for more information:


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.


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. Certification forms are included in the Section 3 packages listed below.

The current list of construction and professional services firms certified as Section 3 Business Concerns is located here"Section 3 HPD Directory of Business Concerns"


Recipients of federally funded contracts for construction/rehabilitation-related work in excess of $100,000, must (1) document the number of new employment opportunities and the number of construction and public works training positions generated by the project and whether those positions are filled by Section 3 residents; (2) Document the number of all Section 3 and non-Section 3 employees already on staff; notify local residents of possible employment and training opportunities; and (4) submit reports documenting Section 3 activities. The following packages contain guidance and forms for use by recipients in compliance with HUD regulations:

Contractors engaged in demolition projects should complete the Section 3 Package located here: Section 3 Package for Demolition Contractors.  One package should be completed and returned to the Agency at the end of each project.

Contractors engaged in new construction or rehabilitation projects funded by HOME should utilize the following: HPD Section 3 Package for DEV Projects.  One package for each project should be submitted to the Agency by January 31st and must cover the preceding calendar year. If a project is completed prior to the end of the calendar year, one package should be submitted at the time of project completion.

Build It Back program recipients should utilize the following:  CDBG DR Section 3 Package for Contractors 2014 AND CDBG DR Employee Self Certification Form 8 2014.  One package should be completed and submitted to the Agency at the end of each project or the end of the calendar year, whichever comes first.

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