Dating back to 1968, with the passing of “Section 3” of the Housing and Urban Development Act, there has existed the “HUD Section 3” business program.

The act required that small businesses receiving US Department of Housing and Urban Development (HUD) funds, “to the greatest extent possible, provide job training, employment, and contract opportunities for low- or very-low income residents in connection with projects and activities in their neighborhoods.”  Over the years it has injected needed funds supporting small businesses and employement in historically marginalized areas.

It has become common for a number of state and federal agencies across the country to require companies bidding on government projects to utilize “HUD Section 3” qualifying businesses.

For that reason it’s important to keep track of how HUD is updating its business program for 2020. In a recent press release the agency announced that it’s streamlining some of its processes that “have not yielded significant benefits”. The hope is that the changes will further encourage Public Housing Agency’s and HUD grantees to focus on sustained employment for low- and very low-income individuals. 

Here is a full list of the changes being implemented:

• Focusing on key outcome metrics, such as the sustained employment of individuals in targeted populations.
• Crediting retention of low- and very low-income employees and successful sustained employment in the reporting metrics.
• Aligning Section 3 reporting with standard business practices and payroll tracking methods.
• Allowing for tailored outcome benchmarks for different geographies and/or different projects.
• Reducing reporting requirements for grantees who are meeting outcome benchmarks.
• Integrating Section 3 oversight into the work of the program offices who are in regular contact with the grantees.
• Promoting the newly created portal to connect low- and very low-income people, who need jobs most, with businesses who have Section 3 job opportunities in their area.

For more see: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_20_159