Section 3 is a provision of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u and 24CFR Part 135) that helps foster local economic development, neighborhood economic improvement, and individual self-sufficiency. The Section 3 program requires that recipients of certain U.S. Department of Housing and Urban Development (HUD) financial assistance, to the greatest extent feasible, provide job training, employment, and contracting opportunities for low-or very-low income residents (regardless of race or gender) in connection with projects and activities in their neighborhoods.
All projects/activities involving housing construction, demolition, rehabilitation, or other public construction - i.e., roads, sewers, community centers, etc. that are completed with covered funding are subject to the requirements of Section 3. Recipients of HUD financial assistance must attempt to reach the Section 3 minimum numerical goals by: (1) Awarding 10 percent of the total dollar amount of all covered construction contracts to Section 3 businesses; and (2) Hiring Section 3 residents for 30 percent of new employment opportunities.
Section 3 Residents are public housing residents or persons who live in the area where a HUD-assisted project is located and who have a household income that falls below HUD's income limits.
A Section 3 Business Concern is a business that is: (a) 51 percent or more owned by a Section 3 resident or (b) Employs Section 3 residents for at 30 percent of its full-time, permanent staff; or (c) Provides evidence of a commitment to subcontract to Section 3 business concerns, 25 percent or more of the dollar amount of the awarded contract. In accordance with this regulation, businesses concerns, seeking preference must be certified by City of Knoxville community development staff. Attached is a current listing of certified Section 3 Business Concerns.