SECTION 3 OVERVIEW City of Memphis Department of Housing and Community Development SCIF Workshop – 28 September 2012

WHAT IS SECTION 3 ? Section 3 of the Housing and Urban Development Act of 1968 is HUD’s directive for providing preference to low- and very-low income residents of the local community (regardless of race or gender) and businesses that substantially employee these persons for new employment, training, and contracting opportunities resulting from HUD- funded projects.

WHY SECTION 3 ?  HUD allocates substantial funding for projects and activities that produce significant employment and other economic opportunities.  Recipients of housing assistance and low income individuals often have restricted access to employment and other economic opportunities.  HUD funding can offer an effective means of empowering low-income individuals.  HUD wants HUD money to benefit local residents where HUD funds are expended.

SECTION 3 POLICY & PURPOSE To ensure that economic opportunities generated from HUD-funded projects will, “to the greatest extent feasible,” be directed to low- and very-low income persons – particularly those receiving assistance for housing.

COMMITMENT TO SECTION 3  The City of Memphis, Division of HCD, as a grantee and/or recipient of federal funds, is required by HUD to develop and implement a Section 3 program.  The City of Memphis, Division of HCD embraces the spirit and intent of its obligations under Section 3.  The City of Memphis, Division of HCD requires applicable grant recipients (developers, contractors, subcontractors and others) engaged in projects awarded with funds sourced from the U. S. Department of Housing and Urban Development to adhere to all provisions of Section 3.

SECTION 3 COVERED PROGRAMS  Community Development Block Grant (CDBG)  Home Investment Partnership Program (HOME)  Capital Fund Program (CFP)  Community Housing Development Organization Program (CHDO)  Housing Opportunities for Persons with AIDS (HOPWA)  Economic Development Initiative (EDI)  Brownfield Economic Development Initiative (BEDI)  Emergency Solutions Grants (ESG)  Homeless Assistance  University Partnership Grants  Neighborhood Stabilization Program (NSP)  Certain grants awarded under HUD Notices of Funding Availability (NOFAs)

SECTION 3 APPLICABILITY Section 3 requirements apply to contracting, employment, training, and other economic opportunities arising in connection with HUD-funded construction projects involving:  Housing Construction  Housing Reconstruction or Conversion  Housing Rehabilitation (including reduction and abatement of lead-based paint hazards, but excluding routine maintenance, repair and replacement)  Demolition  Other public construction: roads, sewers, community centers, senior centers, etc.

SECTION 3 TRIGGERS Section 3 is triggered when:  HUD-funded project exceeds $200,000  Grant recipient (contractor, subcontractor and other) is awarded grant contract in excess of $100,000  Normal completion of construction and rehabilitation projects creates the need for new employment, contracting or training opportunities

SECTION 3 GOALS Contracting At least 10% of the total dollar amount of the project awarded to Section 3 businesses Employment At least 30% of the new positions filled with Section 3 residents *Grant recipients will receive assistance with identifying Section 3 businesses and residents.

SECTION 3 REQUIREMENTS SCIF applicants and award recipients are required to :  Submit a Section 3 plan with commitment statements to meet Section 3 goals  Document all efforts toward meeting Section 3 goals  Maintain records and make documents available for monitoring and compliance reviews

QUESTIONS / INFORMATION All questions and requests for additional information will be addressed at the Section 3 table immediately after this session.