HUD Section 3
Ogden City supports the Department of Housing and Urban Development’s (HUD’s) legislative efforts to provide preference to low- and very low-income residents of the local community, regardless of race and gender, and the businesses that substantially employ these persons, for new employment, training, and contracting opportunities resulting from HUD funded projects.
What is Section 3?
The Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701u) (Section 3) requires Ogden City, a HUD entitlement city, to ensure that employment and other economic and business opportunities generated by HUD financial assistance, to the greatest extent feasible, are directed to public housing residents and other low-income persons, particularly recipients of government housing assistance, and business concerns that provide economic opportunities to low- and very-low income persons.
Section 3 is applicable when the normal completion of construction and rehabilitation projects creates the need for new employment, contracting, or training opportunities. If the expenditure of covered funding does not result in new employment, contracting, or training opportunities, the requirements of Section 3 are not applicable.
As a recipient of HUD Community Planning and Development assistance, Ogden City certifies it will comply with the requirements of Section 3. HUD Community Planning and Development programs include the CDBG and HOME Programs. The requirements of Section 3 also apply to contractors or subcontractors that receive contracts in excess of $100,000 for Section 3 eligible projects and activities.
Section 3 Plan
Read Ogden City's Section 3 Plan which identifies the policies and procedures that the Community and Economic Development Department (CED) of Ogden City will implement to ensure compliance in its own operations and those of Section 3 covered developers, sub-recipients, bidders, contractors, and subcontractors with the requirements of Section 3. HUD’s regulations on Section 3 can be found in the Code of Federal Regulations, at 24 CFR 135.
All projects and activities involving housing construction, demolition, rehabilitation, or other public construction, i.e., roads, sewers, community centers, etc., that are completed with HUD Community Planning and Development funding are subject to the requirement of Section 3.
Section 3 Residents
To be considered a Section 3 Resident, at least one of the following must apply:
- Be a resident of Public and Indian Housing;
- Be a Youthbuild participants; or
- Reside in a metropolitan area in which Section 3 applicable assistance is expended and whose income does not exceed income limits set by HUD for low- or very low-income households. Low Income is defined as 80% or below the area median income as determined by HUD.
To determine if you qualify as low income, refer to the US Department of HUD Affordable Housing chart . In accordance with the regulation, residents seeking Section 3 preference shall self-certify their status as a Section 3 resident using the Section 3 Resident Certification Form and shall submit evidence of certification to Ogden City, contractor, or subcontractor, verifying they meet the definitions provided above.
Section 3 Business Concerns
To be considered a Section 3 Business Concern, at least one of the following must apply:
- Business is 51% or more owned by Section 3 residents;
- At least 30% of the business’s permanent, full-time employees are currently Section 3 residents, or within three years of the date of first employment with the firm were Section 3 residents; or
- Business provides evidence of a commitment to subcontract in excess of 25% of the dollar amount of all subcontracts to be awarded to businesses that meet the qualification described above.
In accordance with the regulation, a business concerns seeking Section 3 preference shall certify their status as a Section 3 business through the Utah Department of Workforce Services and shall submit evidence of certification to Ogden City, contractor, or subcontractor, verifying that they meet the definitions provided above.
Implementing Procedures to Ensure Section 3 Requirements
The following Bid Specifications & Contract clause is included in all Ogden City bid specifications and contracts whose funding is derived from HUD and involves housing construction, demolition, rehabilitation, or other public construction, i.e., roads, sewers, community centers, etc.
To ensure compliance with Section 3 requirements, Ogden City will document actions taken to comply, including but not limited to:
- Facilitating the training and employment of Section 3 residents by notifying the Ogden Housing Authority, the Ogden Weber Applied Technology College’s (OWATC) Youthbuild Program, and Utah Department of Workforce Services in Ogden of new employment or training opportunities resulting from the expenditure of covered funding;
- Informing potential Section 3 contractors of the existence of the Utah State Section 3 online registry, and encourage them to review the Section 3 business requirements and, should they qualify, register as a Section 3 business at the Utah State Section 3 website:
- Assisting and actively cooperating with HUD in ensuring contractors and subcontractors comply with Section 3;
- Refraining from entering into contracts with contractors that are in violation of Section 3 regulations; and
- Documenting actions taken to comply with Section 3 and submitting Section 3 Summary reports (HUD Form 60002).