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Back to Basics – Section 3 of the HUD Act, Part 1

Since 1998 the National Black Chamber of Commerce has been promoting one of the best opportunity programs for those living under the poverty level. The name of the program is Section 3 of the HUD Act. As a result of the first Watts Riot, the Nixon Administration implemented the program (1968) and then HUD Secretary George Romney became its champion. Then came the Rodney King Riot and the Clinton Administration made it stronger (1994).

Section 3 provides job training and placement for those living in public housing, Section 8 housing or under the poverty level. A project should strive to hire 30 percent of all new hires. All industries such as construction, waste removal, janitorial, accounting, landscaping, repairs etc. are included. Also, a project should strive to contract at least 10 percent of all projects with Section 3 businesses. A Section 3 business is a company that hires Section 3 workers and may even be owned by a Section 3 resident. Nationally, we are talking about more than a billion dollars of available work. Any recipient of HUD funding must comply with the program.

It is written in the books, but few housing authorities comply with this valuable anti-poverty program. The legal site is: CFR 24 part 135. Google it and learn more about it. In 1998, we had a formal presentation on Section 3 given at our annual conference by the HUD employee in charge of monitoring the program. She thoroughly went over the program. I asked her: How many HUD grantees (including housing authorities) were complying with Section 3? She replied three. Three! For the entire United States. Shortly after that she became ill and died. Now we were really in trouble.

We decided to teach Section 3 to our federation by ourselves. We hired Ray Young who would go out to chapters and perform a full day workshop on how to implement it in your community. Ray was excellent and we were making tracks on it. Oh but the “wolves” are of another mind. HUD would soon approach Ray and offer him a $100,000 job and his choice of venue. It was too good for Ray to refuse and we lost him. Last word was that they had him sitting in a HUD office in Cleveland doing pretty much nothing. Why is HUD so reticent about this great program? They are being pressured by white construction unions to steer these jobs and projects to them (greedy, greedy and greedy) and HUD politicians want that union money to keep coming in. (Damn the deserving such as tenants and the poor).

One of the best examples of how Section 3 is supposed to work was San Francisco Housing Authority. Under the leadership of Mayor Willie Brown, this housing authority had a formal and productive program. Office Depot donated landscaping equipment and the tenants did all of their own landscaping. They were donated a truck and began doing their waste removal. Painting, drywall, repairs, janitorial and accounting. They got computers donated and they were trained in doing the books for the authority. It was just beautiful! But when Mayor Brown left because of term limits, the program was shutdown. Such a shame.

Another problem is to get HUD grant recipients to file their annual report which would show their progress, or lack thereof. 93% would ignore the filing requirement. We partnered with the US Chamber of Commerce and finally woke them up. The last time I checked about 85% were doing the filing. HUD charged us $4000 to receive the report from them.

According to the Code of Federal Regulations: “Each recipient has the responsibility to comply with section 3 in its own operations, and ensure compliance in the operations of its contractors and subcontractors.” They are required to notify public housing residents of the opportunities such as training and opportunities generated by upcoming projects. Also, they must notify potential contractors of the program and monitor their recruiting and performance.

After Katrina, I personally began to enforce Section 3 with one of the housing complexes in New Orleans that was being rebuilt by KBK Enterprises, a Black firm. I thought that this $500 million project could be a role model for the rest of the nation. However, I was met with stiff resistance from the Tenants Association. They were poverty pimping and wanted to stay “in charge.” They would block every attempt to reach out to the residents and train them while they worked and made a salary. I threw up my arms when I ran into one of the principles of the tenant association while he was eating lunch at the W Hotel in downtown Washington, DC. After talking to him, it became clear. He is living high by living in a public housing complex and managing the Tenants Association. Something dirty was going on. I disengaged from the project.

In 2016 we are going to return to our Section 3 advocacy. Any of you who want to help provide jobs and contracts in your community through the Section 3 program, feel free to contact us and we will help you get started.

Mr. Alford is the President/-CEO of the National Black Chamber of Commerce®. Website: www. Email: halford@-

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