Section 3 Section 3 Economic Opportunities for Low and Economic Opportunities for Low and Very Low-Income Persons Very Low-Income Persons 2010 2010 Fair Housing Policy Fair Housing Policy Conference Conference New Orleans, LA New Orleans, LA Staci Gilliam Hampton, Director Staci Gilliam Hampton, Director Economic Opportunity Division Economic Opportunity Division Washington, DC 20410 Washington, DC 20410 202-402-3468 202-402-3468 [email protected]www.hud.gov/section3
Transcript
Section 3Section 3Economic Opportunities for Low and Economic Opportunities for Low and
Very Low-Income PersonsVery Low-Income Persons
2010 2010 Fair Housing Policy Fair Housing Policy
ConferenceConferenceNew Orleans, LANew Orleans, LA
Civil Rights Movement Civil Rights Movement and Protests of the 1960’sand Protests of the 1960’s
Race Riots 1965-1968Race Riots 1965-1968
Los Angeles (Watts), Chicago, Los Angeles (Watts), Chicago, Detroit, NewarkDetroit, Newark
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Section 3 HistorySection 3 History
Kerner Commission—1968 Kerner Commission—1968 President Lyndon JohnsonPresident Lyndon Johnson What happened? What happened? Why? Why? What can be done to prevent What can be done to prevent
from happening again?from happening again? 7 months of investigation7 months of investigation
Riots occurred because of frustration with Riots occurred because of frustration with the the lack of economic opportunities.lack of economic opportunities.
““Our nation is moving to toward two Our nation is moving to toward two societies, one black, one white—separate and societies, one black, one white—separate and unequal.unequal.
Dr. King called the report: “a physician’s Dr. King called the report: “a physician’s warning of approaching death, with the warning of approaching death, with the prescription for life”.prescription for life”.
RecommendationsRecommendations:: Create JobsCreate Jobs Construct New HousingConstruct New Housing Stop de-facto segregationStop de-facto segregation Hire diverse and sensitive police forceHire diverse and sensitive police force Open suburban residential areas to minoritiesOpen suburban residential areas to minorities Government programs were needed to provide Government programs were needed to provide
Lyndon Johnson rejected the Commission’s Lyndon Johnson rejected the Commission’s recommendationsrecommendations
April 1968 (one month after Report was April 1968 (one month after Report was released) Dr. Martin Luther King, Jr. was released) Dr. Martin Luther King, Jr. was assassinatedassassinated
Rioting broke out in more than 100 citiesRioting broke out in more than 100 cities Most of the Commission’s recommendations Most of the Commission’s recommendations
were ultimately adoptedwere ultimately adopted
Statute and RegulationStatute and Regulation
Section 3 of the Housing and Section 3 of the Housing and Urban Development Act of 1968Urban Development Act of 1968 12 U.S.C. 1701u12 U.S.C. 1701u
Economic Opportunity Economic Opportunity RegulationRegulation 24 CFR Part 13524 CFR Part 135
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Regulatory DescriptionRegulatory DescriptionTo ensure that economic
opportunities generated from HUD funded projects, to the
greatest extent feasible, will be directed to low and very low-income persons - particularly those receiving assistance for
housing, and the businesses that provide them economic
opportunities
To the Greatest Extent Feasible???
Recipients must make every effort to recruit, target, and direct economic opportunities to Section 3 residents and businesses.
Comprehensive strategies that are beyond normal procedures.
Simply Stated… Simply Stated… HUD funds are one of the largest sources of HUD funds are one of the largest sources of
federal investment in distressed federal investment in distressed communitiescommunities
These funds typically result in new These funds typically result in new employment, training and contracting employment, training and contracting opportunitiesopportunities
Section 3 is designed to direct new Section 3 is designed to direct new economic opportunities to local residents economic opportunities to local residents and businessesand businesses
Multiplier Effect for HUD dollarsMultiplier Effect for HUD dollars
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IntentIntent Not intended to require recipients or Not intended to require recipients or
their contractors to hire, provide their contractors to hire, provide training or award contracts beyond training or award contracts beyond what is absolutely requiredwhat is absolutely required
If there are going to be new job, If there are going to be new job, training, or contracting training, or contracting opportunities –Section 3 applies opportunities –Section 3 applies
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ApplicabilityApplicability Public and Indian Housing Public and Indian Housing
Housing and Community Housing and Community DevelopmentDevelopment Housing rehabilitation Housing rehabilitation Housing constructionHousing construction Other public constructionOther public construction
CDBG FundingCDBG Funding HOME Funding HOME Funding NAHASDA fundingNAHASDA funding Competitive GrantsCompetitive Grants
EDI and BEDI EDI and BEDI Lead Based PaintLead Based Paint 202/811202/811 ROSSROSS
Project Based VouchersProject Based Vouchers
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2010 Proposed HUD Budget
Public and Indian Housing $7,749 billion• Public Housing Capital Fund• Choice Neighborhoods (formerly HOPE VI)• Public Housing Operating Fund• Native American Housing Block Grants• Native Hawaiian Housing Block Grants
Housing $1,015 billion
• Housing for the Elderly (202 Grants)• Housing for Persons with Disabilities (811 Grants)
Community Planning and Development $8,456 billion
• Community Development Block Grant Fund• HOME Investment Partnerships Program• Self-Help Homeownership Opportunity Program (SHOP)• Housing Opportunities for Persons with Aids (HOPWA) Lead Hazard Control Grants $69 million
TOTAL Section 3 Covered Funds $17,289 billion40% of HUDs Budget
Section 3 Covered Funding
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Applicability to Economic Applicability to Economic Stimulus FundsStimulus Funds
PIH Public Housing Capital FundsPIH Public Housing Capital Funds Neighborhood Stabilization ProgramNeighborhood Stabilization Program Community Development Block GrantsCommunity Development Block Grants Native American Housing Block GrantsNative American Housing Block Grants Assisted Housing Energy & Green Assisted Housing Energy & Green
RetrofitsRetrofits Lead Hazard Control (LHC Grants Only)Lead Hazard Control (LHC Grants Only)
Total: $7.8 Billion Total: $7.8 Billion (57% of HUD’s Stimulus Funds)(57% of HUD’s Stimulus Funds)
Signed by Highest-Elected Officials Signed by Highest-Elected Officials
Westchester County, NY Westchester County, NY
Failing to comply with Section 3 Failing to comply with Section 3 Certifications could have severe Certifications could have severe consequencesconsequences
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Failure to Comply with Failure to Comply with Section 3Section 3
HUD holds direct recipients HUD holds direct recipients of covered funding of covered funding
accountable for their own accountable for their own compliance, and the compliance, and the compliance of their compliance of their
subrecipients and contractorssubrecipients and contractors
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Penalties for Penalties for NoncomplianceNoncompliance
Sanctions for noncompliance Sanctions for noncompliance may include:may include:
DebarmentDebarment SuspensionSuspension Limited Denial of Participation Limited Denial of Participation
in HUD Programsin HUD Programs
Section 3 BeneficiariesSection 3 Beneficiaries& &
ResponsibilitiesResponsibilities
Section 3 ResidentSection 3 Resident
Public Housing Resident, Public Housing Resident, oror
A resident of metropolitan area A resident of metropolitan area or non-metropolitan county in or non-metropolitan county in which the Section 3 covered which the Section 3 covered assistance is expended, and assistance is expended, and who qualifies as a low- or very who qualifies as a low- or very low-income person.low-income person.
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Low- and Very Low-Low- and Very Low-IncomeIncome
HUD sets the low-income HUD sets the low-income limit at limit at 80%80% and very low and very low income limits at income limits at 50%50% of the of the median family incomemedian family income for for counties or metropolitan counties or metropolitan areas across the countryareas across the country
Residents of Public HousingResidents of Public Housing Section 8 Voucher HoldersSection 8 Voucher Holders Recently Unemployed Recently Unemployed VeteransVeterans Recipients of Other Federal Assistance Recipients of Other Federal Assistance
(TANF, unemployment, etc)(TANF, unemployment, etc) Single Mothers Re-entering the Single Mothers Re-entering the
WorkforceWorkforce Recent College GraduatesRecent College Graduates
Section 3 Business Section 3 Business ConcernConcern
51%51% or more owned by Section or more owned by Section 3 Residents, or3 Residents, or
30%30% of employed staff are of employed staff are currently Section 3 Residents currently Section 3 Residents or were Section 3 residents or were Section 3 residents within three years of the date of within three years of the date of first employment; orfirst employment; or
25%25% of the dollar award of all of the dollar award of all subcontracts committed to subcontracts committed to Section 3 Businesses.Section 3 Businesses.
Eligibility for employment Eligibility for employment and contractingand contracting
A Section 3 resident must A Section 3 resident must meet the qualifications of the meet the qualifications of the position to be filled.position to be filled.
A Section 3 business concern A Section 3 business concern must have the ability and must have the ability and capacity to perform.capacity to perform.
Eligibility for employment Eligibility for employment and contractingand contracting
Section 3 is not intended to create Section 3 is not intended to create an “entitlement” for eligible an “entitlement” for eligible residents and businesses—it creates residents and businesses—it creates opportunitiesopportunities
Simply meeting the definitions does Simply meeting the definitions does not automatically mean that they not automatically mean that they will be given jobs or contractswill be given jobs or contracts
Overview of Overview of Recipient ResponsibilitiesRecipient Responsibilities
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Recipient AgenciesRecipient AgenciesDirect Recipients of covered HUD Direct Recipients of covered HUD funding or recipients of covered funding or recipients of covered funding from another direct recipientfunding from another direct recipient
CITIES, COUNTIES, STATESCITIES, COUNTIES, STATES UNITS OF LOCAL GOVERNMENTUNITS OF LOCAL GOVERNMENT PUBLIC OR INDIAN HOUSING AUTHORITIESPUBLIC OR INDIAN HOUSING AUTHORITIES DEVELOPERSDEVELOPERS NON-PROFIT ORGANIZATIONSNON-PROFIT ORGANIZATIONS PRIVATE AGENCIESPRIVATE AGENCIES
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Responsibility #1Responsibility #1
Design and implement Design and implement procedures to comply procedures to comply
with the requirements of with the requirements of Section 3Section 3
All contracts and subcontracts awarded with All contracts and subcontracts awarded with Public Housing funds regardless of the dollar Public Housing funds regardless of the dollar amountamount
Housing & Community DevelopmentHousing & Community Development Contracts for activities involving housing Contracts for activities involving housing
construction, rehabilitation, or other public construction, rehabilitation, or other public construction construction
Contractors may also have responsibilities Contractors may also have responsibilities depending on the dollar amount of their depending on the dollar amount of their award.award.
24 CFR Part 135.3024 CFR Part 135.30
Numerical Targets (may be Numerical Targets (may be exceeded)exceeded)
Safe Harbor Compliance Safe Harbor Compliance
Other Efforts Taken to Achieve Other Efforts Taken to Achieve Compliance—To the Greatest Compliance—To the Greatest Extent Feasible Extent Feasible
Minimum Numerical Minimum Numerical GoalsGoals
Assisting and actively Assisting and actively cooperating with the cooperating with the Assistant Secretary in Assistant Secretary in
obtaining the obtaining the compliance of compliance of
contractorscontractors
Responsibility #7Responsibility #7
Refraining from Refraining from entering into entering into contracts with contracts with
contractors that fail contractors that fail to complyto comply
Responsibility #8Responsibility #8
Documenting actions Documenting actions taken to comply with taken to comply with the requirements of the requirements of Section 3, results of Section 3, results of actions taken, and actions taken, and
impediments, impediments, if anyif any
Responsibility #9Responsibility #9
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Section 3 ReportingSection 3 Reporting
Form HUD-60002Form HUD-60002
Online Reporting SystemOnline Reporting System
Reports submitted to FHEO in Reports submitted to FHEO in Washington, DCWashington, DC
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Determining Determining ComplianceCompliance
Absent Evidence to the Absent Evidence to the Contrary Contrary
Overall 38% of employment and training Overall 38% of employment and training opportunities were provided to Section 3 opportunities were provided to Section 3 residents (residents (17,569 economic opportunities17,569 economic opportunities))
9.4% of Construction Contracts were awarded 9.4% of Construction Contracts were awarded to Section 3 businesses ($354 Million)to Section 3 businesses ($354 Million)
Many larger recipients still failed meet Many larger recipients still failed meet minimum goals or provide adequate minimum goals or provide adequate explanationsexplanations
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Increase Section 3 reporting Increase Section 3 reporting rates and accuracyrates and accuracy
Section 3 Business Concern Section 3 Business Concern Registry—Pilot Program Registry—Pilot Program
2010 & 2011 2010 & 2011 InitiativesInitiatives
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Section 3 Implementation and Section 3 Implementation and Coordination NOFACoordination NOFA
Incorporate Section 3 compliance Incorporate Section 3 compliance into Annual Plans and into Annual Plans and Performance Assessments Performance Assessments
Enforce penalties for Enforce penalties for noncompliance noncompliance
Guidance Materials Guidance Materials Sample DocumentsSample Documents Link to Online Reporting Link to Online Reporting Upcoming TrainingsUpcoming Trainings Model ProgramsModel Programs Contact Information Contact Information [email protected]
