Issue #102, November/December 1998


Section 3: A Viable Solution for Job Creation?


Dina Schlossberg of Regional Housing Legal Services in Glenside, Pennsylvania, compares Section 3 of the Housing and Urban Development Act of 1968 to the Community Reinvestment Act. While Section 3 has the potential to be a good job creation tool, it's helpful to think of the law as a good organizing tool, says Schlossberg, who works on Regional Housing Legal Services Section 3 Monitoring Project.

Section 3 requires public housing authorities (PHAs) and other recipients of HUD funds to target, to the greatest extent feasible, low-income people, and particularly public housing residents, for the jobs and economic opportunities generated by their operations. These opportunities include job training and the awarding of contracts to local businesses that, in turn, hire locally. Section 3 doesn't provide funds but rather governs the use of existing funds.

For many years Section 3 lay largely dormant until it was revived in 1992 in the wake of the Los Angeles riots. It was strengthened through a series of amendments in 1992 and an interim rule in 1994 clarifying the types of HUD financial assistance, activities, and recipients subject to Section 3.

Section 3 covers a wide spectrum of resources and can be broadly applied in neighborhoods where poor people live, Schlossberg said. Most of the jobs Section 3 creates are in construction and related trades, but Schlossberg said there's opportunity to apply Section 3 to include more jobs on the operation side of public housing, even conceivably in such occupations as childcare.

Schlossberg said there are two problems that limit the use of Section 3: HUD does nothing to monitor it, and it only applies to new hires. In addition, the jobs available to residents under Section 3 are frequently temporary. Another problem with Section 3 is the perception among PHAs of a conflict between the mandates of Section 3 and contracting laws. According to Section 3 Reporter, a newsletter produced periodically by the Section 3 Monitoring Project, many PHAs believe they must accept the lowest bid under federal, state, and local law.

A report by Jacqueline Leavitt and Mary Ochs sponsored by the Legal Aid Foundation of Los Angeles and the University of California at Los Angeles Department of Urban Planning echoes Schlossberg's view that Section 3 has potential and can be applied to require all recipients of HUD funds to make good faith efforts to provide job opportunities to low-income people and small businesses located in the area of HUD-funded developments.

In Lessons from the Field on the Implementation of Section 3, the Manpower Demonstration Research Corporation (MDRC) found that "Section 3 alone cannot deliver the numbers of jobs and economic opportunities to form the centerpiece for a large-scale resident employment effort." The MDRC report, which looked at Section 3 in seven housing authorities, found only 3.1 jobs created for every million dollars spent. The report concludes that "PHAs will do well to pursue a variety of job and economic opportunity strategies that include, but are not limited to, Section 3."

The MDRC report, however, was issued in November 1996. Welfare reform has since propelled at least some housing authorities to step-up efforts to steer job opportunities to residents. In Hartford, Connecticut, for example, over 300 public housing residents have been hired in the past two years under Section 3.

Paul Capra, the Hartford Housing Authority's (HHA) special assistant to the executive director for planning and development, attributes HHA's relative success with Section 3 to a number of factors. The influx of more than $90 million in HUD Comprehensive Grant, Hope VI, and New Development funds came at a time when Connecticut had passed into law onerous deadlines for welfare recipients to find jobs. He said HHA's executive director wanted to do something locally to assist residents who were at risk of bumping up against the welfare deadlines. HHA began the Family Reunification Program, a national model that aims to bring fathers back together with their families and, where possible, makes them eligible for Section 3 construction job opportunities.

HHA also lets residents know of available jobs through Family Investment Centers in its Stowe Village and Charter Oak Terrace developments. Through the centers, participants establish a Training and Service Plan with a caseworker. This work plan takes a family from their current status through family stabilization to further education or training and a job. The Family Investment Center staff has monthly contact with the families and the service providers. The authority also runs a Campus of Learners program in Charter Oak Terrace, which emulates a campus setting to provide training and ensure that residents are ready for job opportunities available under Section 3, as well as through other avenues.

Finally, Capra said the housing authority has hired new staff members who are well connected with residents and the community, and the welfare department has located a sub-station of caseworkers in one development to further assist residents in seeking available jobs.

Capra acknowledged the high recidivism rates for residents who gain temporary jobs under Section 3. In light of the problem, HHA includes in contracts with building contractors an agreement that the contractors can't lay off workers without letting the housing authority know. That way, said Capra, the housing authority can intervene early and work with residents to seek new jobs.

Schlossberg attributes the success with Section 3 in cities like Hartford, Los Angeles, and Cleveland to greater community participation in those cities. To make Section 3 work, she said, advocates should become more educated about the potential job and training opportunities available under Section 3's mandate. The law is so wide open, it could even cover providing resources to advocacy groups to assist public housing residents in preparing for and securing jobs, according to Schlossberg. She noted that not one penny of $40 million in funding for a Hope VI Project in Philadelphia was put aside for job training. She said advocacy groups should be honest about the needs of their communities and fight for a piece of project budgets to be put aside for job training.

"[Section 3] works the best when people are informed about it on the grassroots level," she said.

Copyright 1998


Contacts:

  • Section 3 Monitoring Project, Regional Housing Legal Services, 2 South Easton Rd, Glenside PA 19038; 215-572-7300
  • Hartford Housing Authority, 475 Flatbush Ave., Hartford, CT 06106; 860-275-8487.