The Department of Housing and Urban Development (HUD) has released the results of the first stage of its increased oversight and enforcement of job creation requirements under Section 3 of the Housing and Urban Development Act of 1968.

In a press release on Monday HUD said that more than 3,100 state and local government agencies that receive HUD funds have responded to its campaign to expand hiring and contracting opportunities for low-income persons and three out of  four of HUD-funded state and local agencies had submitted their annual reports.  HUD said that this was the largest response since HUD made such reporting mandatory.

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

Agencies required to file the reports include recipients of funds from Community Development Block Grants, Neighborhood Stimulus Program, Homeless Assistance, and Economic Development Initiative.  The requirement covers entities such as state and local governments, Native American tribes, property managers, mortgagors, and public private non-profit organizations.  

HUD sent letters to more than 3,500 agencies last October reminding them of their reporting obligations.  This is the initial step in what HUD describes as "an aggressive two-year Section 3 Implementation Plan to increase hiring and training opportunities.

"HUD's mission is to invest in people as well as buildings," said John Trasviña, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "This initiative is a huge step toward creating job opportunities for low- and very low-income individuals and ensuring that state and local governments partner with HUD.

HUD said that in 2008 its funding generated more than 17,000 new employment and training opportunities for Section 3 residents and facilitated the award of more than $340 million in HUD-funded construction contracts to Section 3 businesses. The funding also enabled about 3,600 Section 3 businesses to receive contracts to complete work on HUD-funded projects.

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