HUD has sent to the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) a proposed rule to streamline the Section 3 requirements. The listing on an OIRA webpage does not provide any detail other than the title of a proposed rule pending OIRA review: “Streamlining the ‘Section 3’ Requirements for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses (FR-6085).”
The purpose of Section 3 of the Housing and Urban Development Act of 1968 is to ensure that when HUD funds are used to assist housing and community development projects, preference for some of the new jobs, training, and contracting opportunities created by the funding should go to low income people and to the businesses that hire them “to the greatest extent feasible.”
When federal agencies such as HUD propose regulations, they must send them to OIRA for review. OIRA responds with comments to HUD, and HUD takes the comments into consideration. Although HUD does not have to abide by OIRA suggestions, given the power wielded by OMB, agencies generally accept them. When the OIRA review is completed, HUD eventually publishes the OIRA-approved proposed or final rule in the Federal Register.
HUD’s Spring Regulatory Agenda, posted on May 9, 2018, by OIRA (see Memo, 5/14), removed the 2015 proposed rule for Section 3 developed by the Obama administration with significant input from advocates. In its place, the administration’s Spring Regulatory Agenda provided a substantially different description of a proposed Section 3 rule.
One sentence was of particular potential concern: “The rule proposes to align and integrate oversight and reporting by eliminating complaint and compliance review provisions in favor of program-specific mechanisms, thereby reducing burden.” The other new descriptive text was:
“The rule also proposes opportunities to encourage the training of low- and very low-income persons to ensure the availability of a skilled workforce once the construction or renovation begins. Finally, it would establish thresholds at levels at which federal assistance effectively generates new economic opportunities, provide a mechanism to adjust thresholds over time, align requirements to typical recipients’ business practices to reduce burden, and clarify the obligations of covered recipient agencies.”
NLIHC will continue monitoring the OIRA site and include updates in Memo as the proposed rule moves through the system and when a proposed rule is published for comment in the Federal Register.
The Section 3 listing on the OIRA webpage is at: https://bit.ly/2PnIQuJ
Information about Section 3 is on page 7-38 of NLIHC’s 2018 Advocates’ Guide.
Information about the federal regulatory process is on page 2-7 of NLIHC’s 2018 Advocates’ Guide.