MICAH Jobs and Economics Task Force
Westlawn Sub-committee

MICAH’S Jobs and Economic Development Task Force pursues a variety of economic justice issues, none more important than our Westlawn subcommittee’s continued work with other organizations across the nation to ensure federal Housing and Urban Development Section 3 spending fulfills its intended purpose.

 

HUD spends billions of dollars in distressed communities for projects that build and rehabilitate housing and improve roads and community centers. The Section 3 regulation acknowledges this spending typically generates new contracting, employment, and other economic opportunities and multiplier effects. Original policy required a preference that a fair share of these benefits got to low and very low income residents (regardless of race or gender) in the form of employment, training, and contract opportunities.

 

Unfortunately, and due in part to a changing economic landscape since these regulations came into effect in 1968, Section 3 goals were not being met in many cities, including Milwaukee. Due in part to a complaint filed by MICAH, the Housing Authority of the City of Milwaukee (HACM) was found to be in non-compliance with section regulations with respect to the phase I of the Westlawn Project, a $200 million neighborhood housing and redevelopment initiative.

 

Based on the findings from that complaint, the HACM entered into an agreement with HUD in August 2014 and later announced a revised Section 3 plan would be available for public review and comment. The authority collected public comment at four public meetings and prepared a revised proposal that HUD must now approve. HACM will prepare a revised proposal that will be submitted to HUD for approval.

 

Thanks in part to MICAH and other organizations across the nation who have battled with how the Section 3 requirements have been implemented, HUD finally realizes that these rules need to be updated to accommodate our changing economy. HUD has proposed substantial changes to Section 3 rules which would:

  • Establish clearer guidelines for achieving compliance “to the greatest extent feasible.”
  • Require new hires to work a minimum percentage of hours.
  • Revise the definition of a “Section 3 business.”
  • Set a new funding threshold for Public Housing Authority grantees.
  • Require PHA’s and grantees to monitor contractor payroll data.
  • Mandate reference to Section 3 requirements in Project Labor Agreements.
  • Incentivize job retention and apprenticeship opportunities for Section 3 residents.
  • Issue penalties for failure to submit Section 3 annual reports.
  • Impose program sanctions on PHAs and grantees that fail to comply.
  • Stipulate that relief may possibly be provided to aggrieved entities.

 

Moving forward, MICAH’s Westlawn Sub-committee will continue to meet regularly with HACM officials to ensure that future projects funded with Section 3 dollars will, as they are intended, properly benefit the poor and underserved members of our community.