Section 3 Policy

Oklahoma City Housing Authority Section 3 Policy

What is Section 3?
Section 3 is a policy mandated by Congress. It is part of the Housing and Urban Development Act of 1968. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by certain U.S. Department of Housing and Urban Development (HUD) financial assistance shall, to the greatest extent feasible, and consistent with existing federal, state, and local laws and regulations, be directed to low- and very low-income persons and business concerns that provide opportunities to low- or very low-income persons, particularly those who are recipients of government assistance for housing or residents of the community in which the federal assistance is spent.

OKC Housing Authority’s Part in Compliance
Oklahoma City Housing Authority (OCHA) shall comply with Section 3 requirements to ensure the financial assistance OCHA receives, for the greatest extent feasible, is utilized by low- and very low-income residents and business concerns which are owned and/or provide economic opportunities to low- and very low-income persons.

OCHA Policy Statement
OCHA and all Contractors (construction and/or non-construction) shall provide equal employment opportunity to all employees and applicants for employment without regard to race, color, religion, sex, national origin, disability, veteran’s or marital status, and sexual orientation. All job applicants and existing employees shall be given fair and equal treatment. The implementation of this policy is through the awarding of contracts, to the greatest extent feasible, to create employment and business opportunities for residents and/or businesses to low- and very low-income persons. OCHA and all Contractors shall be proactive in the recruitment, employment, training, and utilization of OCHA residents and other eligible persons within the community for any work made available due to contracts funded by HUD monies.

Changes to Section 3 Effective 2021
Changes to Section 3 adopted by HUD became effective July 1, 2021. The new Section 3 regulations can be found in the Code of Federal Regulations at 24 CFR 75, which replaced 24 CFR 135. The most significant changes under the new rules are that Section 3 compliance will be tracked by labor hours rather than new hires and contracts, and there are no longer Section 3 business contracting goals or requirements. However, HUD and the OCHA encourage the solicitation and utilization of certified Section 3 business concerns to provide contracting opportunities to these firms to assist in meeting Section 3 goals.

This new rule applies to housing rehabilitation, housing construction, and other public construction projects assisted under HUD programs when the total amount of federal assistance to the project from such programs exceeds a threshold of $200,000. Developers of Section 3 projects receiving $200,000 or more from one or a combination of two or more applicable HUD programs (e.g. CDBG, HOME, etc.), will be expected to ensure that to the greatest extent feasible, either directly or through their contractors, employment opportunities at the project are directed to low- and very low-income persons, including seasonal and temporary employment opportunities. The threshold is $100,000 where the assistance is from the Lead Hazard Control and Healthy Homes programs.

To comply with the new rules, new compliance and reporting requirements will be imposed on all Section 3 projects receiving funding from OCHA.

Section 3 covered projects involve the construction or rehabilitation of housing (including reduction of lead-based paint hazards), or other public construction such as: street repair, sewage line repair or installation, updates to building facades, etc.

Section 3 is both race and gender neutral. The preferences provided under this regulation are based on personal income level and location.

For more information about these changes, please review HUD’s FAQs for Section 3, which are available at the following link:

OCHA will use HUD established benchmarks to determine if contractors and subcontractors “to the greatest extent feasible” made their “best efforts” to “direct job opportunities that are generated with HUD financial assistance (e.g. CDBG, HOME, etc.) to Section 3 workers and targeted Section 3 workers. These benchmarks include the following goals: 

Labor Hours: 

  • 25% of all labor hours performed by Section 3 workers; and 
  • 5% of all labor hours performed by targeted Section 3 workers. 

The 5% goal will count towards the overall 25% Section 3 Worker goal. HUD will use a benchmark based on ratios of Section 3 workers and targeted Section 3 workers in comparison to all workers.

If benchmarks are not met by contractors and subcontractors working on a Section 3 project, documentation of efforts must be provided. Per 24 CFR §75.15 and §75.25, the efforts reported to HUD may, for example, include but are not limited to the following: 

  • Engaged in outreach efforts to generate job applicants who are targeted Section 3 workers.
  • Provided training or apprenticeship opportunities.
  • Provided technical assistance to help Section 3 workers compete for jobs (g., resume assistance, coaching).
  • Provided or connected Section 3 workers with assistance in seeking employment including: drafting resumes, preparing for interviews, and finding job opportunities connecting residents to job placement services.
  • Held one or more job fairs.
  • Provided or referred Section 3 workers to services supporting work readiness and retention (g., work readiness activities, interview clothing, test fees, transportation, childcare).
  • Provided assistance to apply for/or attend community college, a four-year educational institution, or vocational/technical training.

More examples
Additional examples of efforts that contractors and subcontractors may be required to document and report to HUD are in the Federal Register. To review these additional examples, please review the Federal Register notice published 9/29/2020, titled "Section 3 Benchmarks for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses."

Section 3 Worker: a worker who meets at least one of the following:

  • The worker's gross income for the previous or annualized calendar year is below the income limit established by HUD. Low- and very low-income limits are typically established at 80 percent and 50 percent of the area median individual income. HUD income limits may be obtained from the following link:
  • The worker is employed by a Section 3 Business Concern. 
  • The worker is a YouthBuild participant.

Targeted Section 3 Worker: a worker who meets at least one of the following:

  • The worker is employed by a Section 3 Business Concern. 
  • The worker is a YouthBuild participant. 
  • The worker is a resident in public housing, Section 8-assisted housing, and/or a resident of other public housing projects or Section 8-assisted housing managed by the Public Housing Agency that is providing the assistance (applies only to Public Housing Assistance Projects).
  • The worker lives within the service area or the neighborhood of the project. Per 24 CFR § 75.5; “service area or the neighborhood of the project” means an area within one mile of the Section 3 project, or, if fewer than 5,000 people live within one mile of a Section 3 project, within a circle centered on the Section 3 project that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census (applies only to Housing and Community Development Assistance). 

Section 3 Business Concern: A business that meets at least one the following:

  • It is at least 51% owned and controlled by low- or very low-income persons. 
  • Over 75% of the labor hours performed for the business over the prior three-month period are performed by Section 3 workers. 
  • It is a business at least 51% owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing. 


This is a partnership between OCHA and their contractors to ensure the employment of Section 3 workers and help in ending the cycle of unemployment.

Staff at OCHA is available to assist you with your Section 3 questions. Please contact (405) 239-7551 or post questions at