The Housing and Urban Development Dept. releases a proposed rule to revise its Sec. 3 regulations. Programs guided by the Sec. 3 regulations are, to the greatest extent possible, to provide job training, employment and contract opportunities for low- or very-low income residents in connection with projects and activities in their neighborhoods.
Public housing authorities must meet the Sec. 3 regulations, as well as the following programs:
Community Development Block Grant; HOME Investment Partnership Neighborhood Stabilization Program Grants; Economic Development Initiative Brownfield Economic Development Initiative; Grants Housing Opportunities for Persons with AIDS or HOPWA Homeless Assistance Grants; University Partnership Grants; and Lead Hazard Control Grants.
The Sec. 3 regulations haven’t been updated since 1994. The agency has tried to ensure compliance through requiring significant reporting of these grantees over the past two decades. Noncompliance has become a major issue over the past decade, thus the agency is in the process of revising the regulations. The proposed rule would make 11 significant changes, including the requirements that Sec. 3 grantees implement procedures and create regulations to ensure compliance with the regulations.
A significant change is the revised “new hire” definition. The previous Section 3 regulations established a goal for 30% of new hires to be Sec. 3 residents, regardless of the length of time that the resident is employed. As a result, the Sec. 3 regulations created a loophole, by allowing contractors to hire Sec. 3 residents for relatively short periods of time and this short-term employment met the new hire requirement.
This proposed new definition would close this loophole by redefining a Sec. 3 new hire for contractors or subcontractors as a person who works a minimum of 50% of the average staff hours worked for the job category for which the person was hired throughout the duration of time that the work is performed on the covered project.
Contact: Staci Gilliam, 202/402-3468