Section 3 Requirements

Information for Contractors: Construction and Non-Construction

PHA is committed to providing quality housing and economic opportunities for our residents and the neighborhoods we serve.

One of the major vehicles for this is Section 3 of the HUD Act of 1968, which requires that most contracts that will be paid using HUD funds include commitments to provide low-income individuals with a springboard for economic empowerment through direct participation in construction and most other activities funded by HUD. Section 3 requirements apply to all contract awards from public housing authorities, other than contracts for materials and supplies.

HUD considers public housing authorities to be in compliance with Section 3 if they and their contractors and subcontractors (for contracts other than for materials and supplies) meet the following minimum numerical goals for Section 3 Labor Hours and Qualitative Efforts:

A. Section3 Worker and Targeted Section 3 Worker Labor Hours Requirements

  • 25% or more of all labor hours worked by all workers employed with public housing financial assistance in PHA’s fiscal year must be completed by Section 3 workers (including Targeted Section 3 Workers).
  • Of the above 25%, 5 % or more of all labor hours worked by all workers employed with financial assistance in PHA’s fiscal year must be Targeted Section 3 workers
    • Section 3 Worker labor Hours / Total labor hours = 25% AND
    • Targeted Section 3 labor hours / Total labor hours = 5%.

B. Qualitative Efforts  

If vendors are unable to meet the Section 3 Safe Harbor Benchmarks identified above, PHA may consider a vendor’s Qualitative Efforts.  A full list of Qualitative Efforts, including making a contribution to PHA’s Section 3 fund, can be in 24 CFR Part 75.

Section 3 Compliance Reporting System

Contractors and vendors that have contracts with PHA are required to file timely Section 3 compliance reports throughout the calendar year. To file a compliance report and access the system, please select the link below.  A list of the information needed for the report can be found in documents below. If there are any questions, please contact the Section 3 Department at (215) 684-4234, [email protected]

Contractors / Vendors

Click here to submit your Section 3 Compliance Report

Section 3 Reporting “How To” Video

Click Here to watch the ‘how to’ videos on completing your Section 3 Compliance Report.

Note: Contractors must continue to submit Quarterly Section 3 Compliance Reports for all contracts awarded prior to 7/1/2021. For all contracts awarded after 7/1/2021, Contractors must submit their reports on a monthly basis.
To file a complaint please send complaints to [email protected].

Documents and Resources

HUD’s Section 3 website


Section 3 Compliance
Office of Audit and Compliance
2013 Ridge Avenue
Philadelphia, PA 19121
[email protected]

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