FAQs - Economic Opportunities / Numerical Goals

Q. How can residents and businesses locate recipient agencies that are required to comply with Section 3 in their area?
To find local recipients agencies, Section 3 residents or businesses should contact their local HUD office. To find your closest office, visit: hud.gov/localoffices

Q. How can I find Section 3 businesses in my area?
Contact local recipient agencies to find Section 3 business concerns in your area.

Q. What types of new employment opportunities are covered by Section 3?
For public and Indian housing (PIH) programs, all employment opportunities generated by the expenditure of operating, capital, and modernization assistance, including management and administrative jobs, technical, professional, construction and maintenance jobs, at all levels.

For housing and community development programs, all employment opportunities arising in connection with housing rehabilitation (including reduction and abatement of lead-based paint hazards); housing construction; or other public construction, including management and administrative jobs, technical, professional, building trades and non-construction jobs, at all levels.

Q. Are recipient agencies required to meet the Section 3 goals, or are they optional?
The Section 3 numerical goals are minimum targets that must be reached in order for the Department to consider a recipient in compliance. Recipient agencies are required to make best efforts to the greatest extent feasible, to achieve the annual numerical goals for employment and contracting. If an agency fails to fully meet the Section 3 numerical goals, they must adequately document the efforts taken to meet the numerical goals (see Question #2 for a discussion of "to the greatest extent feasible").

Q. What are the Section 3 minimum numerical goals?
The minimum numerical goal for employment is thirty (30) percent of the aggregate number of new hires shall be Section 3 residents, annually- i.e., 3 out of 10 new employees needed to complete a Section 3 covered project/activity shall be Section 3 residents.

The minimum goals for contracting are:

• Ten (10) percent of the total dollar amount of all Section 3 covered contracts for building trades work for maintenance, repair, modernization or development of public or Indian housing or building trades work arising in connection with housing rehabilitation, housing construction and other public construction, shall be awarded to Section 3 businesses; and
• Three (3) percent of the total dollar amount of all non-construction Section 3 covered contracts shall be awarded to Section 3 businesses

Q. What is considered a Section 3 covered "non-construction" project?
Section 3 covered non-construction projects include maintenance contracts, including lawn care, re-painting, routine maintenance, HVAC servicing, and professional service contracts associated with construction ( ex.: architectural, engineering, legal services, accounting, marketing, etc.).

Q. What is considered "other" public construction?
Other public construction includes infrastructure work, such as extending water and sewage lines, sidewalk repairs, site preparation, installing conduits for utility services, etc.

Q. Are the numerical goals the same as set-asides and quotas?
No. A set-aside guarantees that a specific portion of funds will be provided to a protected class. Section 3 goals are minimum numerical targets that a recipient of HUD Section 3 covered financial assistance must try to reach to attain compliance with Section 3.

Q. What is the meaning of the "safe harbor" determination?
When a recipient agency or contractor meets the numerical goals, the recipient or contractor is considered to be in compliance with Section 3, absent evidence to the contrary (i.e., evidence or findings obtained from a Section 3 compliance review).

Q. What should recipient agencies or contractors do if they fail to meet the minimum numerical goals set forth in the regulation?
Recipient agencies and their contractors must adequately document all efforts taken to comply with the requirements of Section 3, and explain why despite their efforts "to the greatest extent feasible"; the minimum numerical goals were not met.

The Department will take each agency's explanation into consideration when making compliance determinations.