The U.S. Department of Housing and Urban Development (HUD) recently published a notice updating the interim regulation at 24 CFR Part 135, which provides for compliance with Section 3 of the Housing and Urban Development Act of 1968 (Section 3). Since 1994 (until now), the interim regulation has remain unchanged. The purpose of Section 3 is to ensure that when employment or contracting opportunities are generated because a covered project or activity necessitates the employment of additional persons or the awarding of contracts for work, preference will be given to low- and very low-income persons (Section 3 residents) or business concerns (Section 3 businesses) residing in the community where the project is located.

HUD’s notice seeks to incorporate new HUD programs established since 1994, promote compliance with Section 3, and codify “best practices” implemented by recipients of HUD funds. The notice proposes several changes to the Section 3 interim regulation, including but not limited to, clarifying the definitions of “new hire” and “Section 3 business,” changing the numeric goals for awarding contracts, and permitting recipients of HUD to accept self-certifications from Section 3 residents and businesses.

Interested persons are invited to submit comments on the notice no later than 60 days following the date of publication in the Federal Register (which is not yet known). The notice identifies certain key areas for which HUD is most interested in receiving comments. Comments may be submitted: 1) by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500 or 2) by electronic submission at

For more in depth coverage, please keep an eye out for Ballard Spahr’s alert that will be posted later this week.