CBPP: As more low-income renters struggle, federal subsidies favor well-off homeowners

CCP: Stabilizing neighborhoods through effective rental registration programs

HUD: New MTW committee and timeline for expansion

The HUDdle: Expanding horizons with STEM education

The HUDdle: Fulfilling HUD's commitment to creating economic opportunities

NCSHA: HOTMA introduced in Senate

Next City: Harvard's national housing report has bad news for renters

NHC: Using opportunity mapping to improve affordable housing policy

NLIHC: Live podcast on the housing affordability crisis

Rooflines: To reduce recidivism rates, turn to housing policy

Urban Wire: National housing supply falls short of demand by 430,000 units

This week in a letter sent out to covered recipients, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) announced the relaunch of the Section 3 Performance Evaluation and Registry System (SPEARS) for the submission of annual summary reports (Form HUD-60002) and to notify Section 3 businesses about the availability of local HUD-funded contracts. In 2012, the system had been disabled due to fatal technical errors and lapses in information security, leaving PHAs, PJs, and other covered recipients unable to submit reports for the 2013 and 2014 reporting periods.

As previously reported, no recipients were penalized for failing to submit Form HUD-60002 while the system was disabled, although grantees were encouraged to maintain sufficient records to facilitate report submission once the system had been relaunched. With SPEARS officially back on-line as of August 24, 2015, however, electronic submission of Form HUD-60002 for the 2013 and 2014 reporting periods can resume. Submissions are due no later than October 30, 2015. Agencies who fail to submit by this date will be subject to penalties in accordance with the type of covered assistance.

To access SPEARS, users must obtain an ID and password in HUD’s Web Access Secure System (WASS). User registration instructions, submission instructions, FAQs, video training, and additional information can be found on HUD’s Section 3 webpage.

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. And if you missed it the first time, check out our blog series on what you need to know about Section 3.

While serving as executive director of a Minnesota housing authority, Nan McKay started one of the nation’s first Section 8 programs. She has previously written for the NMA blog on the topic of executive management and high performance achievement in the HCV program as well as stories from her fifty years in the housing industry.

Regulatory Knowledge for Smart Management

Legislative Update with Nan McKay
Presenters, Nan McKay with Terry Provance and Annie Stevenson

One of the most popular sessions at the NMA and GoSection8 Housing Conference is always Nan's review of recent regulations, guidance, and breaking news. We're bringing her back this year to fill us in on the most important notices of 2015, including the final rule on affirmatively furthering fair housing (AFFH), proposed rules on streamlining, Section 3, and VAWA, and a forecast of what she sees ahead for our industry in 2016 and the second half of the decade.

Register online or email sales@nanmckay.com for more information. Don't delay, only four days left for early bird discounts! Plus, you’ll have the opportunity to reserve a free, one-hour consulting session with one of our NMA experts before they're all gone.

Yesterday HUD issued a press release about the new Section 3 proposed rule, which has not yet been published in the Federal Register but was previewed earlier this week in an advance copy.

The press release (and an accompanying set of FAQs) highlights the nationwide Section 3 business registry. Established in July 2014, the Section 3 registry is a searchable online database that local housing authorities, government agencies, and contractors can use to find firms that are self-certified as employing at least 30 percent public housing residents or low-income workers. In other news:

Housing Finance: Rents rising faster than incomes

The HUDdle: Going green

NHC: Housing affordability improves slightly, but challenges remain for working renters and people of color

Today is the first day of spring, and after the winter we've had, it's safe to say most of us are looking forward to it. Enjoy your weekend!

HUD’s Office of Policy Development and Research (PD&R) has posted an advance copy of the Section 3 proposed rule. The 99-page document has not yet been published in the Federal Register. A 60-day public comment period will open upon its publication.

The purpose of Section 3 of the Housing and Urban Development Act of 1968 is to ensure that when HUD assists housing and community development projects, preference for some of the new jobs, training, and contracting opportunities that are created go to low-income people and to the businesses that hire them, “to the greatest extent feasible.” Since 1994, the Section 3 program has been governed by an interim regulation. For the first time in 20 years, HUD is proposing a new rule that would expand opportunities for public housing residents and low-income workers and increase contracting opportunities for local businesses. According to PD&R’s web page dedicated to the proposed rule:

The proposed rule clarifies definitions and provisions that are left to interpretation and eases barriers to reaching compliance for recipients of HUD funding. It ensures that public housing authorities and other grantees are implementing consistent procedures for determining which residents and businesses should be counted towards Section 3 compliance. The proposed rule also addresses a number of concerns expressed by stakeholders to HUD and codifies “best practices” implemented by high-performing grantees.

PD&R has also posted the following resources related to the proposed rule:

• A one-page fact sheet
• A four-page summary
• A 15-page regulatory impact assessment
• A 6-page document containing 14 specific questions for which HUD is requesting comments

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. And if you missed it the first time, check out our recent blog series on what you need to know about Section 3.

Housing Finance: IRS announces 2015 LIHTC, bond caps

The HUDdle: Survivors of domestic violence need fair housing, not eviction

NCSHA: HUD reports further decline in homelessness

NCSHA: Judge rejects HUD's disparate impact rule

New York Times: Free broadband for public housing in New York sought as condition in Comcast deal

Next City: NYCHA is revisiting its policy of barring many formerly incarcerated people from public housing

Next City: Using Wall Street tactics to preserve affordable housing

NLIHC: 40 years ago: Public housing changes in Housing and Community Development Act of 1974

Off the Charts: Neighborhoods do matter to kids' success

Off the Charts: Tens of thousands apply for scarce housing vouchers

PD&R Edge: Why did Pruitt-Igoe fail?

Rooflines: HUD's perspective on the Rental Assistance Demonstration

Shelterforce: Lifting the fog on Section 3

Washington Post (via Planetizen): These five charts show the progress made in fighting homelessness

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.

• Part I: Why does it matter?
• Part II: Is my PHA subject to Section 3?
• Part III: What are my PHA’s responsibilities?
• Part IV: Can you recommend some Section 3 best practices?

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.

2. 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.

3. 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.

4. Designate or hire a Section 3 coordinator. 'Nuff said.

5. 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.

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.

• Part I: Why does it matter?
• Part II: Is my PHA subject to Section 3?
• Part III: What are my PHA's responsibilities?
• Part IV: Can you recommend some Section 3 best practices?

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.

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.

• Part I: Why does it matter?
• Part II: Is my PHA subject to Section 3?
• Part III: What are my PHA's responsibilities?
• Part IV: Can you recommend some Section 3 best practices?

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.

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.

• Part I: Why does it matter?
• Part II: Is my PHA subject to Section 3?
• Part III: What are my PHA's responsibilities?
• Part IV: Can you recommend some Section 3 best practices?

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.