What is Section 3?
Section 3 is the legislative directive from the U.S. Department of Housing and Urban Development (HUD) for providing preference in new employment, training, and contracting opportunities that are generated by HUD-funded projects to low- and very low-income local residents (regardless of race or gender). Section 3 also provides contracting preferences to local businesses that substantially employ low- and very low-income residents of the local community.
Section 3 is activated when construction and rehabilitation projects create the need for new employment, contracting, or training opportunities. Recipients or contractors are not required to hire Section 3 residents or award contracts to Section 3 businesses other than what is needed to complete a covered project. If the expenditure of a covered project does not result in new employment, contracting, or training opportunities, the requirement of Section 3 is not activated. Nevertheless, the recipient and its contractors are required to submit Section 3 report information.
As a condition of receiving HUD housing and community development program funds, recipients must certify they will comply with the requirements of Section 3. HUD has the legal responsibility to monitor recipients for compliance and can impose penalties upon those that fail to meet these obligations.
Section 3 Programs
The following are examples of federal housing and community development programs with construction activities that require Section 3 compliance.
Program |
Current Partners / Developers |
| CDBG |
City of Grand Rapids Housing Rehabilitation Office
City of Grand Rapids Engineering Department
Home Repair Services, Inc.
Various Curb and Sidewalk Contractors |
| Lead Hazard Control Program |
City of Grand Rapids Housing Rehabilitation
Various Sole Proprietors and Small Businesses |
| HOME Program |
Various Nonprofit Developers
City of Grand Rapids Housing Rehabilitation Office |
| Neighborhood Stabilization Program (NSP) |
Various Nonprofit Developers
Various For Profit Developers |
City of Grand Rapids Section 3 Handbook
This document describes the Section 3 requirements, guidelines, and policies. It describes what the City of Grand Rapids and those who contract with the City for construction projects need to do in order to comply with Section 3. This handbook also contains examples of strategies to assist in implementation, and a list of organizations that can help reach individuals and businesses who qualify as Section 3.
Section 3 Resident Certification
Any person seeking Section 3 preference in hiring and training shall complete the Community Development Department's
Section 3 Resident Certification. The individual seeking Section 3 preference shall provide adequate documentation regarding permanent residence and income. Verification of income eligibility may consist of any of the following:
- A public housing or Section 8 lease agreement;
- Evidence of income (most recent W-2 or income tax return);
- Evidence of receipt of public assistance;
- Any other evidence acceptable to the City.
Section 3 Business Certification Any business seeking Section 3 preference shall complete the Community Development Department?s Certification for Business Concerns Seeking Section 3 Preference in Contracting. This is a self-certification, and Section 3 business concerns ultimately bear the responsibility of maintaining their Section 3 status and complying with all related HUD regulations.
Certifications for Section 3 preference for business concerns must be submitted to the Community Development Department prior to the submission of bids for review. Business concerns shall provide any additional documentation upon request.
Section 3 Business List
Section 3 Businesses that have submitted certifications to the City of Grand Rapids.
Section 3 Plan Template - Owners, Developers, General Contractors
Section 3 Plan Template - Subcontractors