HUD FINALIZES REVISED SECTION 3 RULE
New rule will advance economic opportunity through streamlined processes and a more targeted approach

WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today the release of the final rule implementing the “Section 3” statute. Section 3 requires that recipients of certain HUD funds make economic opportunities available for low- and very low-income individuals, especially recipients of government assistance for housing, living in the areas where HUD funds are spent. An “interim rule” has been in effect since 1994.  The final rule is designed to improve a focus on economic opportunity outcomes while simultaneously reducing the regulatory burden on those entities that receive those funds.

"HUD funding is an investment in the people we serve, not just an investment in affordable housing or community development," said Secretary Carson. "Section 3 works to bring economic opportunities to HUD families and ultimately drives self-sufficiency through sustainable employment. From day one, President Trump said that the forgotten men and women of this country will be forgotten no more, this rule embodies that creed.”

The changes in the final rule improve the effectiveness of Section 3, streamline some processes that have not yielded significant benefits, and encourage PHAs and HUD grantees to focus on sustained employment for low- and very low-income individuals. Key changes in the rule and in HUD’s implementation include:

• 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.