WASHINGTON – August 12, 2014 – (RealEstateRama) — The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a Voluntary Compliance Agreement with the Housing Authority of the City of Milwaukee (HACM), resolving HUD findings the housing authority failed to comply with Section 3 of the Housing and Urban Development Act of 1968. HACM agreed to change its hiring and contracting practices to increase hiring of public housing and other low-income residents, as well as contracting with businesses that employ low-income persons.
Section 3 of the Housing and Urban Development Act of 1968 requires that training, employment and contracting opportunities generated by certain HUD financial assistance be, to the greatest extent feasible, directed to public housing residents and to other low-income persons (whose family income does not exceed 80% of the area median income) and to very low-income persons (whose family income does not exceed 50% of the area median income) in the community.
“With Section 3, HUD investments are more than brick and mortar. They form a pathway to opportunity and self-sufficiency,” said HUD Assistant Secretary of Fair Housing and Equal Opportunity Gustavo Velasquez.
“This voluntary agreement between the Department and the Housing Authority of the City of Milwaukee provides a ladder of opportunity for low-income people and for Section 3 businesses in Milwaukee,” said HUD Midwest Regional Administrator Antonio R. Riley. “The measure of this Agreement lies in the access that residents and small businesses now have to the employment and training possibilities being extended by the Housing Authority, and for that we are optimistic.”
“HACM and HUD worked together to develop this agreement as a more detailed roadmap to achieve Section3 goals,” said HACM Secretary-Executive Director Tony Pérez. “The Housing Authority and HUD share the mission to foster economic opportunities for low-income residents and contractors, and the VCA will be a valuable tool in guiding our collective efforts to achieve that mission. We thank all those who came together and gave of their time and knowledge in crafting this agreement.”
HACM’s Section 3 initiative is part of a cadre of HACM programs that work to reduce the effects of poverty and improve quality of life for low-income residents. These programs include workforce development assistance to increase wages and self-sufficiency, neighborhood initiatives to improve educational and health outcomes, and a leading emerging business enterprise program that builds the capacity of minority- and women-owned businesses to compete in the public and private marketplaces.
The agreement is the result of a HUD limited compliance review of HACM following community complaints about a lack of local residents or people of color at the housing authority’s Westlawn Redevelopment Project. From 2009 to 2012, HACM received more $230 million dollars in funding from HUD, including operating subsidies, capital funds, modernization funds, development funds and American Recovery and Reinvestment Act funds. During the same period, HACM awarded more than $60 million in construction and other contracts as part of the Westlawn Redevelopment Project.
According to HUD’s compliance review, no Westlawn residents and no residents from other HACM developments were hired to work on the Westlawn Project. The HUD review foundthat HACM was noncompliant with important Section 3 obligations, including that it did not provide employment and contracting opportunities to qualified HACM residents and Section 3 businesses, that HACM policies and procedures incorrectly exempted smaller contracts from the Section 3 contracting preferences, that HACM did not require contractors and subcontractors to post information about how to seek employment at the Westlawn Project site, and that HACM failed to notify HACM residents of training and employment opportunities related to the project.
Under the terms of the agreement, HACM commits to correct and revise its Section 3 Plan and seek public comment before submitting it to HUD for approval. HACM will identify businesses interested in contracting with the housing authority that will certify they are eligible for Section 3 contracting preferential consideration. HACM also will identify its public housing residents and others seeking employment who are entitled to a Section 3 hiring preference. HACM and its contractors and subcontractors will consider job seekers with Section 3 preferences when filling vacancies and will explain decisions not to hire them in writing. HACM will also expand training and outreach activities including the creation of a $50,000 Section 3 Fund to be used for training, outreach and other purposes related to Section 3.
HUD’s national Section 3 Business Registry is a new resource for qualified Section 3 businesses – those that put a priority on hiring public housing or low-income residents. The registry allows these businesses to register their company so they can be alerted about new contracting opportunities. Local agencies can also search the database to find local Section 3 businesses. To learn more about HUD’s Section 3 Business Registry, visit: www.hud.gov/sec3biz. To file a complaint against a direct recipient of HUD funding for violations of the Section 3 requirements, go to www.hud.gov/Section3.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the
need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build
inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
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