Section 3 Opportunities

Overview

The Oakland Housing Authority (OHA) has established a policy whereby any project or activity funded with U.S. Department of Housing and Urban Development (HUD) funds, to the extent applicable, must meet the requirements of OHA’s Section 3 Policy as outlined in this document.  This Section 3 Policy is required to be a flow down provision and applies to each subcontract at every tier. “Section 3” is established by Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u, and implementing Regulations at 24 C.F.R. 75. This Policy is intended to be consistent with the federal requirements.

This document serves to fulfill two (2) main objectives: 1) it contains program definitions, requirements, information on program assistance provided by OHA and 2) it outlines the Section 3 program compliance measures of OHA.  

There are two specific OHA Section 3 Goals:  one for Section 3 Workers, and one for Targeted Section 3 Workers.  For OHA, the goal for Section 3 Workers is set at 25 percent or more of the total number of labor hours worked by all workers employed by the contractor/subcontractor on the Project from June 30 to July 1 of the following year (OHA’s fiscal year). The benchmark for Targeted Section 3 Workers is set at 5% or more of the total number of labor hours worked by all workers employed by the contractor/subcontractor on the Project within OHA’s fiscal year. This means that the 5% is included as part of the 25% threshold.

The Contractor is required to submit with its bid/proposal package a Section 3 Plan for OHA review and written approval. The Section 3 Plan will detail the processes to be implemented to ensure that the above Section 3 goals will be met. The plan should specify the number of positions expected to be created and what minimum qualifications and skills will be required in order to perform the positions.  The plan should also address the Contractor’s strategy for recruiting OHA residents for the available positions, which should include consultation with OHA’s Section 3 Coordinator.

Qualitative processes to be included, but not limited to, in the Section 3 Plan are identified below. The HUD Section 3 website has additional educational resources and tools for developing the Section 3 Plan. The HUD website can be accessed at https://www.hud.gov/.

The OHA Resident & Community Services Coordinator (from the Department of Family and Community Partnerships or FCP) is the OHA’s point of contact for assistance in identifying OHA’s Section 3 and Targeted Workers. 

FCP will generate potential job applicants who are Targeted Section 3 workers with the following:

  • Providing technical assistance to help Section 3 workers compete for jobs (e.g., resume assistance, coaching)
  • Providing or connecting Section 3 workers with assistance in seeking employment including: drafting resumes, preparing for interviews, and finding job opportunities connecting residents to job placement services
  • Holding one or more job fairs
  • Providing or referring Section 3 workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare).
  • Providing assistance to apply for/or attend community college, or vocational/technical training
  • Assisting Section 3 workers to obtain financial literacy training and/or coaching
  • Engaging in outreach efforts to identify and secure bids from Section 3 business concerns.

Definitions

A family (including single persons) whose income does not exceed 80% of the median income for the area, as determined by HUD, with adjustments for smaller and larger families (See OHA income eligibility chart attached.)

A family (including single persons) whose income does not exceed 50% of the median family income for the area, as determined by HUD, with adjustments for smaller or larger families (See OHA income eligibility chart). 

Section 3 Worker: A Section 3 worker is any worker who currently fits into, or when hired within the past five years fit into, at least one of the following categories: 

  1. The worker’s income for the previous or annualized calendar year is below the income limit established by HUD. 
  2. The worker is employed by a Section 3 business concern.
  3. The worker is a YouthBuild participant.

Section 3 Business Concern: A Section 3 business concern is any type of business (e.g. sole proprietorship, partnership, non-profit, corporation) that meets at least one of the following criteria, documented within the last six-month period: 

  1. At least 51 percent owned and controlled by low- or very low-income persons; 
  2. Over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers; or 
  3. A business at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing. 

YouthBuild programs receive assistance under the Workforce Innovation and Opportunity Act (29 U.S.C. 3226).

YouthBuild is a community-based pre-apprenticeship program that provides job training and educational opportunities for at-risk youth ages 16-24 who have previously dropped out of high school. 

YouthBuild participants learn vocational skills in construction, as well as in other in-demand industries that include health care, information technology, and hospitality. Youth also provide community service through the required construction or rehabilitation of affordable housing for low-income or homeless families in their own neighborhoods.

Targeted Section 3 Worker: A targeted Section 3 worker is a Section 3 worker who: 

  1. is employed by a Section 3 business concern: or
  2. currently fits or when hired fit at least one of the following categories, as documented within the past five years: 
  3. a resident of public housing projects or Section 8-assisted housing managed by Oakland Housing Authority; or 
  4. a YouthBuild participant.

General Federal Requirements

Pursuant to Section 3, and consistent with existing Federal, state, and local laws and regulations Contractor shall make best efforts to provide:

  • employment and training opportunities arising in connection with the Project to Section 3 workers in the following order of priority:
    • to residents of public housing projects managed by OHA or residents of Section 8-assisted housing managed by the Authority, 
    • to participants in YouthBuild programs; and 
    • to low- and very low-income persons residing within the metropolitan area (or nonmetropolitan county) in which the Project is located.
  • contracts and subcontracts for work awarded in connection with the Project are provided to business concerns that provide economic opportunities to Section 3 workers in the following order of priority:
    • to Section 3 business concerns that provide economic opportunities to residents of public housing projects managed by the Authority or residents of Section 8-assisted housing managed by the Authority, 
    • to YouthBuild programs; and 
    • to Section 3 business concerns that provide economic opportunities to Section 3 workers residing within the metropolitan area (or nonmetropolitan county) in which the Project is located.

Contractor will be considered to have complied with the Section 3 requirements, in the absence of evidence to the contrary, if it certifies that it has followed the prioritization of effort set forth above and meets or exceeds the applicable Section 3 benchmark as described in 24 C.F.R. 75.13(b).

Documenting and Reporting-Section 3 Plan

  1. Contractor shall maintain records of its Section 3 activities and cause such records to be accurate and current and in a form that allows OHA to comply with the reporting requirements of 24 C.F.R. 75.15.
  2. Contractor agrees to report the labor hours performed by Section 3 Workers for the work identified in each payment request to the project owner.  The monthly reporting of Section 3 Worker hours, as prepared by the Contractor, must be approved in writing by OHA’s Labor Compliance Officer. 
  3. The Contractor and its subcontractors shall provide all required compliance data with respect to Contractor’s Section 3 Plan to OHA via LCP tracker software. The Contractor and its subcontractors shall be responsible for responding to any requests for data or information by the noted response due dates. The Contractor shall also be responsible for ensuring that all subcontractors have completed all requested items with complete and accurate information and that their contract information is current.

Compliance Reporting Systems

OHA utilizes LCPtracker in order to monitor the compliance requirements for Davis-Bacon, and Section 3 labor hour tracking policy requirements for construction projects.  

LCPtracker, is accessible to ALL OHA Prime Contractors (as well as Subcontractors). Contractors will use LCP Tracker for certified payroll submission activities.    

Section 3 Calculations

Below are the formulas for calculating Section 3 Workers and Targeted Section 3 Workers. This formula will be utilized to validate that contractors have met OHA’s Section 3 goals: 

  • Section 3 Workers =  >   25% of Total Labor Hours
  • Targeted Section 3 Workers =  >   5% of Total Labor Hours

Rufus Davis

Labor Compliance Officer/Section 3 Monitor

T: (510) 587-2176

rdavis@oakha.org