HUD Enforcing Job Creation Requirements for State and Local Governments

by devteam March 9th, 2010 | Share

ThernDepartment of Housing and Urban Development (HUD) has released the results of thernfirst stage of its increased oversight and enforcement of job creationrnrequirements under Section 3 of the Housing and Urban Development Act of 1968.

In arnpress release on Monday HUD said that more than 3,100 state and localrngovernment agencies that receive HUD funds have responded to its campaign tornexpand hiring and contracting opportunities for low-income persons and threernout of  four of HUD-funded state andrnlocal agencies had submitted their annual reports.  HUD said that this was the largest responsernsince HUD made such reporting mandatory.

UnderrnSection 3, state and local governments that receive funding from HUD in excessrnof $200,000 for activities involving housing construction, demolition, rehabilitation,rnor infrastructure projects such as roads, sewers, or community centers arernrequired to document how those funds are used to hire low income individualsrnand residents of public housing projects. They are also required, to thern”greatest extent possible” to contract with companies who hire thesernindividuals and to report on those efforts.  The latter requirement applies to contractorsrnand subcontractors who are awarded a contract for more than $100,000.  Reporting is required only where funds usedrnfor construction and covers new employment made available under the funding.

Agenciesrnrequired to file the reports include recipients of funds from CommunityrnDevelopment Block Grants, Neighborhood Stimulus Program, Homeless Assistance, andrnEconomic Development Initiative.  Thernrequirement covers entities such as state and local governments, NativernAmerican tribes, property managers, mortgagors, and public private non-profit organizations.rn 

HUD sentrnletters to more than 3,500 agencies last October reminding them of theirrnreporting obligations.  This is therninitial step in what HUD describes as “an aggressive two-year Section 3rnImplementation Plan to increase hiring and training opportunities.

“HUD'srnmission is to invest in people as well as buildings,” said John Trasviña, HUD'srnAssistant Secretary for Fair Housing and Equal Opportunity. “This initiative isrna huge step toward creating job opportunities for low- and very low-incomernindividuals and ensuring that state and local governments partner with HUD.

HUD said that in 2008 its fundingrngenerated more than 17,000 new employment and training opportunities forrnSection 3 residents and facilitated the award of more than $340 million inrnHUD-funded construction contracts to Section 3 businesses. The funding alsornenabled about 3,600 Section 3 businesses to receive contracts to complete workrnon HUD-funded projects.

In addition, HUD's Officernof Fair Housing and Equal Opportunity has trained thousands of HUD recipients,rnresponded to hundreds of requests for technical assistance from state and localrngovernments, and published new guidance materials on its Web site. Futurernactivities will include awarding eight competitive grants ranging from $50,000rnto $100,000 to help local governments hire Section 3 coordinators.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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