Federal agency designed to foster local economic development

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OPPORTUNITIES AWAIT—Renee Robinson, Section 3 specialist and Robert Damewood, staff attorney at Regional Housing Legal Services are set to plan their strategy to get the word out about an important law. (Photo by Diane I. Daniels)

 

by Diane I. Daniels
Regional Housing Legal Services and Commonwealth Housing Development Corporation officials are looking for low-income businesses located in Allegheny County. Their goal is to certify as many businesses as possible for Section 3 eligibility.
Birthed out of the 1960s Civil Rights movement, though racially neutral, Section 3 is designed to help foster local economic development, neighborhood economic improvement, and individual self-sufficiency. Section 3 of the U.S. Housing and Community Development Act of 1968 requires recipients of the U.S. Housing and Urban Development funding to provide training, hiring, and contracting opportunities to low-income residents of the area where the HUD-funded project is located, “to the greatest extent feasible.”
“Section 3 is a law that has been on the books for 45 years that has never been fully realized,” said Robert L. Damewood a staff attorney for RHLS. Explaining, he said the law applies to all federal and community development funded projects and is in place to ensure that the HUD funds invested in housing and community development activities also provide employment opportunities for low-income people.
The wording of the law is the main culprit Damewood and his coworker Renee Robinson identify as to why Section 3 throughout the years has not been upheld fully. Specifically they say the phrase “to the greatest extent feasible” is vague. Damewood believes because it is an unfunded mandate, companies don’t really reach out to the community to fulfill the primary obligation of Section 3. He says the three- fold requirements are for companies to provide outreach and training for Section 3 residents, to hire and train Section 3 residents, and to contract with Section 3 businesses with all three actions to be reported.
Since early 2012 Robinson, a Section 3 specialist has been working to certify low-income businesses in Allegheny County as “Section 3 eligible” which she says allows businesses to receive a contracting preference on HUD-funded development projects.
“Because most people and entrepreneurs in the county are not aware of Section 3, during my tenure I have been conducting outreach to educate the public on this mandate,” said Robinson. “There are a lot of federally funded projects occurring in the region that residence can be receiving training and employment and businesses can be gaining contracts.” Naming a few, Damewood identified developments of the Urban Redevelopment Authority of the City of Pittsburgh, the city and county Housing Authorities, Allegheny County Economic Development and Penn Hills as HUD-funded entities.
Pointing out that Section 3 applies to construction and non-construction contracts, Robinson indicated that a covered developer or contractor must award at least 10 percent of the dollar value of all construction contracts and 3 percent of the dollar value of all other contracts to Section 3 Business Concerns.
She outlined the three business concerns as: 51 percent or more of the business being owned by individuals whose household income is not greater than 80 percent of the HUD Area Median Income; 30 percent or more of the business’ full time, permanent employees having household incomes no greater than 80 percent of AMI as of the initial date of hire; or the business awards 25 percent or more of the dollar value of the business’ contract to business concerns that meet the qualifications set forth in the above mentioned. “Only one of the outlined concerns has to be met,” she emphasized.
She outlined Section 3 income eligibility limits as:
80 percent AMI
1 Person    $36,350
2 person    $41,550
3 Person    $46,750
4 Person    $51,900
5 Person    $56,100
Each Additional $4,150
The certification process to become eligible as a Section 3 business, Robinson said consists of filling out a simple application form. “The time it takes to complete the application certainly is worth what a business receives once completing the process,” Robinson said.
She said benefits of being a certified Section 3 Business Concern include receiving preferential consideration for contract awards on HUD funded projects in which one submits a formal bid and a copy of their Section 3 Business Concern certificate of eligibility. CHDC places your company in a searchable database that can be used by covered developers and contractors to identify Section 3 Business Concerns and the CHDC forwards notices of contract solicitation to businesses from the database. She pointed out that Section 3 certification does not automatically entitle a business to a contract on HUD-funded development projects, only a contracting preference.
Section 3, according to the HUD website is in place to preserve and create jobs and promote economic recovery assistance to those most impacted. It played an important role after the 1992 civil disturbance in Los Angeles, and the rebuilding after Hurricane Katrina in 2005. It is said that today due to the global economic crisis, the rise in unemployment and massive home foreclosures makes Section 3 implementation more crucial than any other time in American History. The law has placed HUD at the fore front to provide economic opportunities for residents and businesses with the greatest need, according to the site.
To gain a full understanding of the Section 3 process and to learn of eligibility, Robinson says the best way to be informed is by contacting her at 412-304-1890.
As an affiliate of RHLS, Damewood describes his organization as a state wide nonprofit law firm. As a part of legal services, he says the group represents nonprofit organizations that improve neighborhoods not people. The group is described as offering unique expertise in affordable, sustainable housing and its related components such as community and economic development, utility matters and preservation of home ownership. RHLS provides innovative project and policy solutions that help create sustainable communities offering decent, safe and affordable housing for lower-income Pennsylvanians.
RHLS and CHDC along with a suite of housing, resident assistance and community development organizations—the Housing Alliance of Pennsylvania, Neighbor Works, Equity Protection, Legal Clinic and Uptown Partners are located at 710 Fifth Ave.

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