What you need to know about Section 3: Part IV

Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it’s probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.

The intent of Section 3 is to provide these opportunities to the “greatest extent feasible,” as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.

Can you recommend some Section 3 best practices?

  1. As with any large-scale, long-range, and collaborative initiative, your PHA’s Section 3 program should be planned out strategically. Not planning it out is planning to fail! Look at the mission, brainstorm SWOTs, identify stakeholders, assess gaps in your internal resources, and put together a project plan that includes responsibilities and timelines.
  1. Collaboration begins within the PHA! Procurement can’t do this alone. You’ll also need to include resident initiatives, human resources, and finance — and your Section 3 efforts must be championed from the top down with strong and supportive leadership.
  1. Self-sufficiency staff and programs are key internal partners. Do you have an FSS program? Tie in Section 3 to your residents’ individual training and services plans (ITSPs). A ROSS program? YouthBuild? Public housing self-sufficiency projects? All your economic self-sufficiency programs and activities can contribute to Section 3 success.
  1. Designate or hire a Section 3 coordinator. ‘Nuff said.
  1. Now you’re ready to creatively and effectively collaborate with community partners. Work with the people doing the work! They’ll help make your Section 3 program successful. These crucial partners will help you design an effective Section 3 program, and will help outreach, recruit, train and ensure hiring. Consider forming a Section 3 advisory board and include decision makers and experts from your local city or county government, Department of Labor Workforce Investment Board, welfare agency, community colleges, skilled trades, and other key stakeholders. At least one public housing resident should be a participant on the Section 3 advisory board.

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.

Looking for further guidance? We can bring our Procurement and Section 3 seminar to your PHA. Email sales@nanmckay.com for more information about our affordable onsite training options.

What you need to know about Section 3: Part III

Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it’s probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.

The intent of Section 3 is to provide these opportunities to the “greatest extent feasible,” as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.

What are my PHA’s responsibilities?

Each PHA (and its contractors, subcontractors, and/or subrecipients) is required to:

  1. Comply with procedures to notify Section 3 residents and business concerns of their priority status and opportunities under Section 3
  2. Notify potential contractors working on Section 3-covered projects of their responsibilities
  3. Incorporate the Section 3 clause into all covered solicitations and contracts, which should describe how the bidder plans to recruit, train, and hire low-income residents and how successful trainees are selected for hire
  4. Facilitate training and hiring of Section 3 residents and award of contracts to Section 3 business concerns
  5. Assist in making contractors and subcontractors comply
  6. Ensure that no contracts are in violation of Section 3 requirements
  7. Document actions taken to comply with Section 3 requirements
  8. Submit Section 3 annual reports (form HUD-60002)

Form HUD-60002? What’s that?

Last December, FHEO recorded a training webcast and slide presentation on the department’s new Section 3 reporting system, also known as the 60002 system. Available on the YouTube HUD channel, the 37-minute training webcast includes:

  • An overview of the new system, which represents the first of several steps that HUD intends to take to improve its oversight and monitoring of Section 3 reporting
  • A comparison of the old and new systems
  • Examples of submissions in the new system
  • Information about the transition to the new system
  • An e-mail address to which questions about the new system can be sent: 60002questions@hud.gov

However, as you may be aware, the 60002 system has been temporarily disabled since January. In an email sent July 29 to the Section 3 mailing list, HUD updated PHAs on the ongoing technical problems:

“At this time, the Section 3 Summary Reporting System remains unavailable for the submission of Form HUD 60002 by covered agencies. The Department is aware of the challenges that this inconvenience presents. Please be assured that no recipients will be held in noncompliance for failing to submit 2013 or 2014 Section 3 reports on time, and the unavailability of the system should not result in negative findings during annual audits such as those conducted pursuant to the Single Audit Act (i.e., OMB Circular: A-133).”

The letter also states that new due dates will be communicated once the system has been relaunched. To sign up for the Section 3 mailing list, go here and enter your email address in the “Stay Connected” box on the right, then click “OK.”

We’ll conclude our discussion later this week by outlining some Section 3 best practices for your PHA.

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.

Looking for further guidance? We can bring our Procurement and Section 3 seminar to your PHA. Email sales@nanmckay.com for more information about our affordable onsite training options.

Friday news roundup 9/12/14

HERA infographic

Click to view at full size

In case you missed the update to our recent blog post about increased admin fees, we’ll repeat it here: there is NO time limit on using the new funding. We had originally stated that HUD would recapture unused amounts after December 31, 2014. Our apologies for the error.

Affordable Housing Finance: David Gasson reflects on how the LIHTC program fared in the 113th Congress and looks ahead to the 114th

Harvard Joint Center for Housing Studies: The U.S. population has aged significantly (interactive map)

NCSHA: The U.S. is not prepared to meet the housing needs of an aging population

NHC: Even grandmothers get the (NIMBY) blues

NLIHC: Congress returns with full agenda and little time

Off the Charts: How the federal budget process works—and what happens when it doesn’t

What you need to know about Section 3: Part II

Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it’s probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.

The intent of Section 3 is to provide these opportunities to the “greatest extent feasible,” as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.

Is my PHA subject to Section 3?

Unless your PHA is HCV-only, it’s subject to Section 3. The programs covered by Section 3 include public housing operating subsidies and capital funds, HOPE VI grants, ROSS grants, family self-sufficiency (FSS) grants, economic stimulus funding, and lead hazard control grants. Any entity which receives Section 3-covered assistance, either directly from HUD or from another recipient (such as a PHA, state or local government, property owner, developer, etc.), is subject to Section 3 requirements.

How much housing and community development funding counts?

Section 3 also applies to recipients of more than $200,000 from housing and community development programs. The following are a list of examples of such funds:

  • Community Development Block Grants (CDBG)
  • HOME Investment Partnerships (HOME)
  • Housing Opportunities for Persons with AIDS (HOPWA)
  • Economic Development Initiative (EDI)
  • Emergency Solutions Grants (ESG)
  • Continuum of Care (CoC)
  • Office of University Partnerships (OUP)
  • Neighborhood Stabilization Program (NSP)
  • Section 202 Supportive Housing for the Elderly
  • Section 811 Supportive Housing for Persons with Disabilities
  • Project-based voucher (PBV) program (for projects owned by the PHA)

Do the Section 3 requirements apply to state and county agencies?

Yes. State and county agencies that distribute covered funds to units of local government, nonprofit organizations, or other subrecipients must attempt to reach the minimum numerical goals, regardless of the number of subrecipients that receive covered funding.

What is the definition of Section 3 compliance for training and hiring?

Thirty percent of new hires must be Section 3 residents. Additionally, PHAs and contractors should aim for 30 percent of their permanent fulltime staff to be Section 3. However, keep in mind that once a Section 3 resident has been employed for three years, they can no longer be counted towards the 30 percent goal. Here’s an example:

Calculating Section 3 eligibility

Joan is a Section 3 resident first hired by ABC Company on January 1, 2013.

  • She received a raise of $2,500 in March 2014, thereby putting her above the local low-income level.
  • ABC Company may continue to count Joan as a Section 3 employee until December 31, 2015 (i.e., within three years of the date of first hire).

What is the definition of Section 3 compliance for contracting?

Ten percent of the total public construction contracts dollar amount must go to Section 3 businesses, and 3 percent of non-construction contracts jobs must go to Section 3 businesses.

All contracts (or subcontracts) funded with Public and Indian Housing (PIH) assistance, regardless of dollar amount or type of contract, are subject to the requirements of Section 3.

What are some examples of trades in which Section 3 residents can be trained?

  • Bricklaying
  • Carpentry
  • Carpet installation
  • Cement/concrete
  • Demolition
  • Drywall
  • Electrical
  • Elevator construction and repair
  • Fencing
  • HVAC
  • Janitorial
  • Landscaping
  • Machine operation
  • Surveying
  • Painting
  • Plastering
  • Plumbing
  • Tile setting

What are some examples of Section 3 hiring opportunities?

  • Accounting
  • Architecture
  • Appliance repair
  • Bookkeeping
  • Information technology (IT)
  • Payroll
  • Photography
  • Purchasing
  • Transportation
  • Desktop publishing

What are some examples of Section 3 contracting?

  • Construction or rehabilitation of housing (including reduction of lead-based paint hazards)
  • Street repair
  • Sewage line repair or installation
  • Updates to building facades

Next week, we’ll talk about how this all affects the responsibilities of your PHA.

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.

Looking for further guidance? We can bring our Procurement and Section 3 seminar to your PHA. Email sales@nanmckay.com for more information about our affordable onsite training options.

NLIHC calls for action to fully fund housing programs

The National Low-Income Housing Coalition (NLIHC) is urging PHAs and others to call their members of Congress this week and urge them to protect housing programs. In case you’re interested in participating, here’s NLIHC’s announcement:

Congress returns from August recess this week and will get to work on a continuing resolution (CR) to keep federal programs, including HUD’s housing programs, funded until mid-December. A CR is necessary if Congress does not pass an FY15 HUD appropriations bill before September 30. While a CR will only fund programs at their FY14 levels, a stronger FY15 appropriations bill with strong funding levels would be much better for housing programs. For example:

  • A CR would only fund HUD’s homeless assistance programs at 14% less than the $2.406 billion level requested by President Obama for FY14.
  • At FY14 levels, the housing choice voucher program would be funded at $1.2 billion less than the amount needed to bring back the 40,000 vouchers lost because of 2013’s sequestration, and not yet restored.
  • And, for the critical public housing operating and capital funds, FY14 funding levels are less than both the President requested and the Senate’s FY15 appropriation bill would provide.

At this point, it is unlikely that Congress will pass a full HUD appropriations bill, but will rather move forward with a CR to fund programs just beyond the November elections.

Please join us in calling your Members of Congress to ask them to contact the Chair or Ranking Member of the Appropriations Committee and tell them that providing adequate funding for the McKinney-Vento homeless assistance programs, the housing choice voucher program, the public housing operating and capital programs, the HOME program, and HUD programs are top priorities.

WHY THIS IS IMPORTANT

The House and Senate are back from their August recess for just a couple of weeks before another recess prior to the elections.  During this time, Congress must pass some mechanism to fund programs after the start of the next fiscal year, which begins on October 1. Housing programs will be better off if Congress adequately funds them in FY15 rather than continuing FY14 funding levels.

HOW YOU CAN TAKE ACTION

  • Pick up the phone! Call your Senators and Representative this week and ask to speak to the staff person who works on housing issues.
  • Make the ask! Urge them to support sufficient funding for McKinney-Vento homeless assistance grants, tenant-based rental assistance, public housing, HOME, and other important programs.
  • Report back. Contact us to let us know what type of response you are getting when making your calls. We want to be able to track any progress that is being made. Reach us at outreach@nlihc.org.
  • Spread the word. Forward this action alert to your networks with the phone numbers of your Senate and House offices.

MORE INFORMATION

To find the contact information for your Senators and Representative, simply visit NLIHC’s website and enter your zip code in the “Contact Congress” box at the lower right of the screen. When calling, make sure to ask for the staff person who works on housing issues.

What you need to know about Section 3: Part I

Section 3 of the Housing and Urban Development Act of 1968 requires recipients of HUD funding to create job training, employment, and contract opportunities for low- and very low-income individuals. When you think of HUD funding, it’s probably subsidized housing that comes to mind. However, HUD also provides financial assistance to community centers, libraries, parks, and local road improvement, among other things.

The intent of Section 3 is to provide these opportunities to the “greatest extent feasible,” as outlined in 24 CFR 135.30. This means that other procurement considerations are subordinate to Section 3 goals, and that cost considerations are insufficient grounds for awarding contracts to firms that are not Section 3-compliant.

Why does it matter?

One word: FHEO. The Office of Fair Housing and Equal Opportunity (FHEO) is monitoring Section 3 compliance, and that means it’s high on HUD’s radar. HUD, FHEO, and the Department of Justice (DOJ) have all stated recently that Section 3 will be a priority for enforcement. PHAs, cities, counties, and even states have been put under voluntary compliance agreements (VCAs) for not adequately implementing Section 3 requirements.

FHEO has also invited businesses and low-income persons to learn more about Section 3 by contacting an FHEO representative at their local HUD field office. Section 3 residents, businesses, or a representative of either may file a complaint if they believe that a violation of Section 3 requirements has occurred where a HUD-funded project is planned or underway. Complaints will be investigated; a complaint that cannot be resolved voluntarily may result in an administrative hearing.

Who are Section 3 residents?

Section 3 residents include not just public housing residents, but also YouthBuild participants and low- and very low-income persons. Low and very low-income household limits are determined annually by HUD. These limits are typically established at 80 percent and 50 percent of the median income for each locality by household size or the number of people residing in the house. (You can find them online here.) Housing choice voucher (HCV) families are not automatically considered Section 3 residents, but can qualify on the basis of income.

Who receives Section 3 priority?

For training and development, priority is given to persons in public and assisted housing, persons in the area where the HUD funding is provided, and homeless persons.

Priority is also given to participants in HUD’s YouthBuild programs. In a recent letter posted to the Section 3 website, HUD and the Department of Labor (DOL) announced a partnership in support of YouthBuild, which provides employment and training opportunities for disadvantaged or at-risk youth. The goal of the partnership is to increase apprenticeship opportunities by connecting Section 3-covered contractors and YouthBuild graduates. According to the letter, contractors that sponsor YouthBuild graduates will increase the competitiveness of their proposals when bidding on HUD-funded construction projects. YouthBuild administrators are prepared to market the availability of training opportunities to local Section 3-eligible residents, particularly those residing in public housing.

For contracting, businesses that meet the definition of a Section 3 business concern receive priority.

What is a Section 3 business concern?

A Section 3 business concern is defined as a business that:

  • Is owned (51 percent or more) by Section 3 residents; or
  • Employs Section 3 residents as at least 30 percent of its full-time, permanent staff; or
  • Provides evidence of a commitment to subcontract to Section 3 business concerns for 25 percent or more of the awarded contract

In Part II, we’ll discuss which PHAs are subject to Section 3 and provide some important Section 3 definitions and examples.

NMA senior associate Cara Gillette trains, consults, and provides technical assistance nationwide in fair housing, public housing management, hearings, economic self-sufficiency, and governing boards. Prior to joining NMA, she administered public housing and Section 8 waiting lists, served as hearing officer, managed public housing, and oversaw resident economic development programs at the San Diego Housing Commission. She has previously written for the NMA blog on how to work with sequestration in the public housing program.

Looking for further guidance? We can bring our Procurement and Section 3 seminar to your PHA. Email sales@nanmckay.com for more information about our affordable onsite training options.

The 2014 NMA Model ACOP has shipped!

Subscribers to our annual revision service can expect to receive the latest updates to the NMA Model Admissions and Continued Occupancy Policy (ACOP) and Guide this week. If you have any questions about your subscription, please contact Meg Kennedy in our accounting department and she’ll be happy to assist you.

Most of the changes for the 2014 revision were made necessary by the publication of the Federal Register notice regarding the Violence Against Women Reauthorization Act of 2013 (VAWA), issued August 6, 2013. The notice stated that the provisions of VAWA 2013 were not self-implementing, and that HUD would issue rules or guidance at a later date. However, on September 30, 2013, HUD sent a letter to PHA executive directors which called for immediate policy development addressing certain provisions of VAWA 2013.

In response to HUD’s letter, NMA has developed transitional model policies to assist our subscribers in meeting this HUD requirement. Please note that once HUD issues the expected guidance, additional changes may be required. In addition to the extensive VAWA changes, the 2014 revision has been brought current with all recent regulatory requirements and guidance and also includes:

  • Extensive policy changes concerning flat rent requirements mandated under the 2014 appropriations act and outlined in Notice PIH 2014-12 and its accompanying PIH-issued FAQs
  • Updated policies regarding service animals, assistance animals, and pets, incorporating the latest guidance including Notice FHEO 2013-1
  • A revised definition for extremely low-income (ELI) family, as per the Federal Register notice published June 25, 2014
  • Updates to account for the issuance of Notice PIH 2013-26, which extends the temporary compliance provisions of 2013-03
  • Updates to the list of federally mandated income exclusions as published in the Federal Register
  • Minor modifications for clarification and wording

Looking for further guidance? NMA can help rewrite your ACOP in only three days.

NMA revision services provide a yearly update to your NMA Master Books and model policies with explanations and guidance regarding the most current HUD rules and regulations. To stay updated on the latest program information, try a free 30-day trial subscription to the PIH Alert. Email sales@nanmckay.com to get started.

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