Overview
Effective November 30, 2020, housing construction and rehabilitation projects as well as public works projects that receive more than $200,000 in HOME Investment Partnership Program (HOME), Community Development Block Grant (CDBG), federal Housing Trust Fund or other housing and community development funding from the U.S. Department of Housing and Urban Development (HUD) must comply with Section 3 of the Housing and Urban Development Act of 1968 (“Section 3”). Awardees of HUD funds received prior to November 30, 2020 are also subject to Section 3 requirements, as applicable. Please consult the former policy manual for “Legacy Contracts,” below.
Section 3 requires that economic opportunities generated by HUD funds be prioritized for low-income individuals and the businesses that hire or are owned by them, particularly in the neighborhood surrounding the project. All entities involved in the Section 3 Project (the entity awarded the HUD funds through NYSHCR (the Awardee), the General Contractor, other contractors and subcontractors (together, the “Subs”)) must, to the greatest extent feasible, engage in efforts to achieve Section 3 goals and objectives.
The Benchmark Goals for each Section 3 Project are the following:
25% of Total Labor Hours worked by Section 3 Workers, of which
5% of Total Labor Hours worked by Targeted Section 3 Workers.
Please consult the Section 3 Policy Manual, below, for further information.
KEY DEFINITIONS
Section 3 Worker: An individual employed by Awardee or its Subs who works on the Section 3 Project and who currently fits, or when hired within the past 5 years fit, at least one of the following criteria, as documented:
- The worker’s income for the previous or annualized calendar year is categorized as low-income (80% AMI or less);
- The worker is employed by a Section 3 Business (these are also Targeted Section 3 Workers); or
- The worker is a YouthBuild participant (these are also Targeted Section 3 Workers).
The hiring of a Section 3 or Targeted Section 3 Worker shall not be negatively affected by a prior arrest or conviction. The Section 3 Hiring Form (link below) will guide an employer in determining which employees/candidates are Section 3 and Targeted Section 3 Workers.
Section 3 Business or Section 3 Business Concern: These terms are used interchangeably and mean a business that meets at least one of the following criteria, documented within the last 6-month period:
- At least 51 percent owned and controlled by low-income persons;
- Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 Workers; or
- At least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.
Targeted Section 3 Worker: A Section 3 Worker who:
- is employed by a Section 3 Business; or
- currently fits or when hired fits at least one of the following categories, as documented within the past five years:
(i) Living within the Service Area or the Neighborhood of the project; or
(ii) A YouthBuild participant.
Total Labor Hours: The number of paid hours worked by persons on a Section 3 Project, including those worked by Awardees, subawardees, the General Contractor (“GC”) and all other contractors and subcontractors (together with GC, the “Subs”).
Policy Manual
The Section 3 Policy Manual implements Section 3 of the Housing and Urban Development Act of 1968 and corresponding regulations promulgated by the United States Department of Housing and Urban Development (HUD) found at 24 CFR 75. This Manual covers Section 3 provisions regarding Housing and Community Development Financial Assistance (Subpart C of the regulations), such as HOME, CDBG and federal Housing Trust Fund. This Policy Manual implements the updated Section 3 Regulations that went into effect November 30, 2020. If a Project has HUD funds committed to it before this date, consult the “Legacy Contracts” Policy Manual, below.
Forms & Documents
| Document | Summary | Required for Use by: | Link |
|---|---|---|---|
| Contract Clause | Mandatory language for all S3 projects | Awardee, GC, all Subs | https://hcr.ny.gov/S3ContractClause |
| Participation Plan | Outlines mandatory minimum efforts and sets forth Project’s plan to meet S3 objectives. Must be completed before funding contract execution. | Awardee & GC, Suggested for all Subs | https://hcr.ny.gov/S3ParticipationPlan |
| Sub-Reporting Form & Greatest Extent Feasible Checklist | Form GC and Subs use to report S3 performance up to Awardee | GC and all Subs | https://hcr.ny.gov/S3SubReportingForm |
| Consolidated Awardee Reporting Form | Form Awardee uses to report consolidated S3 performance to NYSCHR | Awardee (consolidating Sub Reporting Forms) | https://s.alchemer.com/s3/Section-3-Reporting |
| Section 3 Business Self Certification | Forms businesses can use to self-certify that they meet the S3 definition for a S3 business | Awardee must have on file for all S3 Businesses on Project | Form: https://hcr.ny.gov/S3BusinessSelfCert |
| Section 3 Hiring Forms | Forms are filed by New York State Regions. Each region contain hiring forms translated into the following 12 languages. -Arabic -Bengali -English -French -Haitian Creole -Italian -Korean -Polish -Russian -Simplified Chinese -Spanish -Urdu -Yiddish | Awardee, GC, all subs |
Section 3 Office Hours
Section 3 Office Hours Schedule
| Date | Time |
|---|---|
| August 26, 2025 | 2:30pm – 3:00pm |
| September 30, 2025 | 2:30pm – 3:00pm |
| October 28, 2025 | 2:30pm – 3:00pm |
| November 25, 2025 | 2:30pm – 3:00pm |
| January 27, 2025 | 2:30pm – 3:00pm |
| February 24, 2025 | 2:30pm – 3:00pm |
For Section 3 updates, office hours schedule, resources and guidance, visit our website: https://hcr.ny.gov/section-3-compliance
We’re excited to offer a dedicated time and space to support you with all things related to HUD’s Section 3 program. Our Section 3 Office Hours are here to provide direct access to guidance, resources, and answers to your questions. Whether you’re new to Section 3 or looking for technical or programmatic support, we’re here to help make implementation of Section 3 program clear and achievable.
Section 3 is a vital initiative that ensures economic opportunities, such as employment and training, are directed to low- and very low-income individuals, especially those who live in or are served by HUD-funded projects, and to provide contracting opportunities for Section 3 businesses.
During our Office Hours, you can:
Ask specific questions about Section 3 compliance and documentation
Get help navigating reporting systems and requirements
Learn how to connect residents with training or job opportunities
Explore ways to meet and exceed your Section 3 goals
Receive updates on HUD guidance and tools
We encourage all HUD-funded, Homes and Community Renewal projects to drop in, no appointment necessary, during one of our Office Hours sessions. The sessions will occur the last Tuesday of every month (see schedule below). To help facilitate addressing questions and/or concerns, please complete and submit Section 3 Office Hours Program Form prior to office hours session using this link: https://survey.alchemer.com/s3/8344707/Section-3-Office-Hours-Program-Form.
Resources & Training
For Contractors
Self Certifying as a Section 3 Business
Certifying as a Section 3 Busines can open several doors of opportunity, especially if you want to get contracts with housing authorities, local governments, or organizations receiving HUD funding.
All awardees and their Subs will collect Section 3 Business Certifications for all Section 3 Businesses working on the Project at or shortly before contract signing with that Section 3 Business. The certification must be dated within 6 months prior to the contract signing.
Breakdown the benefits of Section 3 business certification:
Competitive Advantage
Being certified makes your business stand out when competing for bids, because prime contractors and housing authorities must meet Section 3 compliance goals.
Larger contractors may actively seek out Section 3 businesses to partner with in order to meet requirements.
Networking & Partnership Opportunities
Certified businesses are often listed in business directories, making it easier for government agencies and contractors to find you.
This can increase your visibility and bring subcontracting or partnership opportunities.
Workforce Development Support
Section 3 encourages hiring of low-income residents, which may allow your business to access training programs, local job pipelines, and workforce support.
This can reduce hiring costs while supporting your community.
Community Impact & Reputation
Certification shows a commitment to economic equity and local hiring.
This can strengthen your business’s reputation and enhance relationships with community stakeholders.
Long-Term Growth
Many public housing authorities, city agencies, and nonprofits set aside or strongly encourage awards for Section 3-certified businesses.
For Job Seekers
A Section 3 Worker is a person who qualifies for employment opportunities under Section 3 of the Housing and Urban Development (HUD) Act of 1968.
A Section 3 worker is a worker who currently fits, or when hired within the past five years fit, at least one of the following categories:
Low- or very low-income individual
Their annual household income is at or below the HUD income limits for the area.
A worker employed by a Section 3 business concern
A business that is either owned by low-income persons, employs a significant number of Section 3 workers, or is owned by individuals who reside in HUD-assisted housing or are recipients of HUD-funded programs.
A worker who is a YouthBuild participant
Enrolled in or a graduate of the YouthBuild program, which provides education and job training for young adults.
Job Listings
These sites list job opportunities with employers who have Section 3 hiring requirements. Use keyword searches for “Section 3” to determine which opportunities have a Section 3 component.
New York State Job Bank: https://newyork.usnlx.com/
New York State Contract Reporter: NYS' official source of contracting opportunities. Bringing business and government together. Log In, Sign up and register for your free account! https://www.nyscr.ny.gov/register.cfm
NYCHA Section 3 Job Opportunities: https://opportunitynycha.org/job-opportunities/section-3-information/
Workforce Career Centers: Workforce1 Career Centers - SBS
Legacy Contracts (Pre-11/30/20)
Awardees with HUD funding that was committed to the project by NYSHCR before November 30, 2021 (“Legacy Contracts”) are still expected to comply with Section 3 goals and objectives as outlined in the previous regulation, and should keep written records of Section 3 efforts, hiring and contracting conducted through the completion of the Project. NYSHCR will continue to require annual reporting on Section 3 utilization and greatest extent feasible efforts for these Legacy Contracts. A summary of the changes between the current rule, 24 CFR 75 and the previous rule, 24 CFR 135, can be found in Appendix A. Awardees with Legacy Contracts should follow policies and procedures laid out in the November 2017 Section 3 Policies and Procedures Manual below: