Section 3 Benchmarks for Creating Economic Opportunities for Low- and Very Low-Income Persons and Eligible Businesses, 13199-13204 [2019-06564]
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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules
Authority: 12 U.S.C. 1701x, 1701 x–1; 42
U.S.C. 11371 et seq., 42 U.S.C. 3535(d).
PART 1000—NATIVE AMERICAN
HOUSING ACTIVITIES
§ 576.407
■
[Amended]
23. Amend § 576.407(a) by removing
‘‘24 CFR part 135’’ and adding in its
place ‘‘24 CFR part 75’’.
■
33. Revise § 1000.42 to read as
follows:
24. The authority citation for part 578
continues to read as follows:
■
Authority: 12 U.S.C. 1701x, 1701 x–1; 42
U.S.C. 11381 et seq., 42 U.S.C. 3535(d).
[Amended]
25. Amend § 578.99 by removing
‘‘federal’’ in the section heading and
adding in its place ‘‘Federal’’ and
removing ‘‘24 CFR part 135’’ in
paragraph (i) and adding in its place ‘‘24
CFR part 75’’.
■
PART 905—THE PUBLIC HOUSING
CAPITAL FUND PROGRAM
26. The authority citation for part 905
continues to read as follows:
■
Authority: 42 U.S.C. 1437g, 42 U.S.C.
1437z–2, 42 U.S.C. 1437z–7, and 3535(d).
§ 905.308
§ 1000.42 Are the requirements of Section
3 of the Housing and Urban Development
Act of 1968 applicable?
No. Recipients shall comply with
Indian preference requirements of
section 7(b) of the Indian SelfDetermination and Education
Assistance Act (25 U.S.C. 5307(b)), or
employment and contract preference
laws adopted by the recipient’s tribe in
accordance with section 101(k) of
NAHASDA.
Dated: March 29, 2019.
Matthew F. Hunter,
Assistant Deputy Secretary for Field Policy
and Management.
[FR Doc. 2019–06495 Filed 4–3–19; 8:45 am]
BILLING CODE 4210–67–P
[Amended]
24 CFR Part 75
PART 964—TENANT PARTICIPATION
AND TENANT OPPORTUNITIES IN
PUBLIC HOUSING
Section 3 Benchmarks for Creating
Economic Opportunities for Low- and
Very Low-Income Persons and Eligible
Businesses
28. The authority citation for part 964
continues to read as follows:
AGENCY:
■
Authority: 42 U.S.C. 1437d, 1437g, 1437r,
3535(d).
[Amended]
29. Amend § 964.320 by removing ‘‘24
CFR part 135’’ and adding in its place
‘‘24 CFR part 75’’and removing ‘‘24 CFR
135.7’’ and adding in its place ‘‘24 CFR
75.3’’.
■
PART 983—PROJECT-BASED
VOUCHER (PBV) PROGRAM
30. The authority citation for part 983
continues to read as follows:
■
Authority: 42 U.S.C. 1437f and 3535(d).
§ 983.4
[Amended]
31. Amend § 983.4 by removing the
definition of ‘‘Section 3—Training,
employment and contracting
opportunities in development’’.
■
§ 983.154
[Amended]
32. Amend § 983.154 by removing and
reserving paragraph (c).
■
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DATES:
Comment Due Date. June 3,
Interested persons are
invited to submit comments regarding
this document to the Regulations
Division, Office of General Counsel, 451
7th Street SW, Room 10276, Department
of Housing and Urban Development,
Washington, DC 20410–0500.
Communications must refer to the above
docket number and title. There are two
methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted 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.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly
encourages commenters to submit
comments electronically. Electronic
submission of comments allows the
commenter maximum time to prepare
and submit comments, ensures timely
receipt by HUD, and enables HUD to
make them immediately available to the
public. Comments submitted
electronically through the
www.regulations.gov website can be
viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
ADDRESSES:
27. Amend § 905.308(b)(10) by
removing ‘‘24 CFR part 135’’ and adding
in its place ‘‘24 CFR part 75’’.
§ 964.320
increase the impact of the Section 3
requirements, and streamline and
update HUD’s reporting and tracking
requirements. The proposed rule
includes a requirement that HUD set
Section 3 benchmarks by publishing a
notification, subject to public comment,
in the Federal Register. The proposed
rule provides that HUD will set
benchmarks based on the number of
Section 3 workers and a subset of
Section 3 workers, defined as Targeted
Section 3 workers. If a recipient
complies with the statutory priorities
regarding effort and meets the outcome
benchmarks, HUD would presume the
recipient is following Section 3
requirements, absent evidence to the
contrary. These proposed outcome
benchmarks are being published
concurrently with the proposed rule so
the public can comment on the
proposed benchmarks and methodology
for setting the benchmarks prior to
adoption of the final rule and
benchmarks.
2019.
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
■
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Authority: 25 U.S.C. 4101 et seq.; 42
U.S.C. 3535(d).
■
PART 578—CONTINUUM OF CARE
PROGRAM
§ 578.99
32. The authority citation for part
1000 continues to read as follows:
[Docket No. FR–6085–N–02]
Office of the Assistant Deputy
Secretary for Field Policy and
Management, HUD.
ACTION: Notification of proposed
benchmarks.
Section 3 of the Housing and
Urban Development Act of 1968, as
amended by the Housing and
Community Development Act of 1992
(Section 3), contributes to the
establishment of stronger, more
sustainable communities by ensuring
that employment and other economic
opportunities generated by Federal
financial assistance for housing and
community development programs are,
to the greatest extent feasible, directed
toward low- and very low-income
persons, particularly those who are
recipients of government assistance for
housing. HUD is statutorily charged
with the authority and responsibility to
implement and enforce Section 3.
Elsewhere in this issue of the Federal
Register, HUD published a proposed
rule that would amend the Section 3
regulations to, among other things,
SUMMARY:
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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(FAX) comments are not acceptable.
Public Inspection of Public
Comments. All properly submitted
comments and communications
submitted to HUD will be available for
public inspection and copying
weekdays between 8 a.m. and 5 p.m.
Eastern Time at the above address. Due
to security measures at the HUD
Headquarters building, an advance
appointment to review the public
comments must be scheduled by calling
the Regulations Division at 202–708–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
through TTY by calling the Federal
Relay Service at 800–877–8339. Copies
of all comments submitted are available
for inspection and downloading at
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Alastair W. McFarlane, Director,
Economic Development and Public
Finance Division, Office of Policy
Development and Research, Department
of Housing and Urban Development,
451 7th Street SW, Room 8216,
Washington, DC 20410; telephone 202–
402–5845 (voice/TDD) (this is not a tollfree number). Persons with hearing or
speech impairments may access this
number through TTY by calling the
Federal Relay Service, at toll-free, 800–
877–8339. General email inquiries
regarding Section 3 may be sent to:
section3@hud.gov.
SUPPLEMENTARY INFORMATION:
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I. Background
Section 3 of the Housing and Urban
Development Act of 1968 (Pub. L. 90–
448, approved August 1, 1968) (Section
3) (12 U.S.C. 1701u) was enacted for the
purpose of ensuring, to the greatest
extent feasible, that economic
opportunities generated by the
expenditure of certain HUD financial
assistance are directed to low- and very
low-income persons, particularly those
who receive Federal financial assistance
for housing and those residing in
communities where the financial
assistance is expended. HUD issued
Section 3 regulations through an interim
rule published on June 30, 1994, at 59
FR 33880, and the regulations are
codified in 24 CFR part 135. The
Section 3 regulations at 24 CFR 135.30
currently require that Section 3 covered
public and Indian housing programs
and other HUD programs that are
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covered by Section 3 meet a numerical
goal of 30 percent of the aggregate
number of new hires for a 1-year period
in order to meet a compliance safe
harbor. For contracts awarded in
connection with Section 3 projects and
activities, the current rule also applies
the following goals for each recipient,
contractor, and subcontractor to commit
to award to Section 3 business concerns:
(1) At least 10 percent of the total dollar
amount of all Section 3 covered
contracts for building trades work for
maintenance, repair, modernization, or
development of public or Indian
housing, or for building trades work
arising in connection with housing
rehabilitation, housing construction,
and other public construction; and (2) at
least 3 percent of the total dollar amount
of all other Section 3 covered contracts.
Based on HUD’s experience with
implementing the program over the 24
years that have passed since HUD
promulgated the currently codified
Section 3 regulations, HUD is proposing
to issue new regulations to strengthen
and streamline the Section 3
requirements.
HUD issued a proposed rule, found
elsewhere in this issue of the Federal
Register, that would replace the current
24 CFR part 135 regulations with new
Section 3 regulations in 24 CFR part 75.
The new regulations aim to make
Section 3 goals and reporting more
meaningful and more aligned with
statutory requirements, and to make
compliance easier for recipients. This
proposed rule also includes new metrics
for compliance safe harbors and
provides that these benchmarks will be
set by notification in the Federal
Register. The rule separates out the new
requirements and benchmarks by the
type of funding, as follows:
(1) Public housing program: Subpart
B, Additional Provisions for Public
Housing Financial Assistance, covers
development assistance provided
pursuant to section 5 of the U.S.
Housing Act of 1937 (1937 Act) and
Operating Fund and Capital Fund
assistance provided pursuant to section
9 of the 1937 Act, collectively; these are
defined as public housing financial
assistance in the proposed rule.
(2) Other HUD programs: Subpart C,
Additional Provisions for Section 3
Projects, covers housing rehabilitation,
housing construction, and other public
construction projects assisted under
HUD programs that provide housing and
community development financial
assistance when the amount of
assistance to the project exceeds a
threshold of $200,000, and is defined as
a Section 3 project. This threshold will
not apply to assistance from HUD’s Lead
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Hazard Control and Healthy Homes
programs.
As for new metrics, the rule provides
that HUD will establish, through a
Federal Register notification, Section 3
benchmarks by setting forth one or both
of the following:
(1) The number of labor hours worked
by Section 3 workers divided by the
total number of labor hours worked by
all workers in the recipient’s fiscal year.
(2) The number of labor hours worked
by Targeted Section 3 workers divided
by the total number of labor hours
worked by all workers in the recipient’s
fiscal year.
HUD also provides an alternative,
titled Alternative 2, in the proposed rule
that would provide for using new hires,
as opposed to labor hours, to track
Section 3 workers and Targeted Section
3 workers for public housing financial
assistance (i.e., public housing
authorities (PHAs) and other recipients
of public housing financial assistance).
In the final rule, HUD will adopt either
the use of labor hours, Alternative 1, or
new hires, Alternative 2, for public
housing financial assistance.
The proposed rule explains how HUD
plans to determine these benchmarks,
noting that it may establish a single
nationwide benchmark for work
performed by Section 3 workers and a
single nationwide benchmark for work
performed by Targeted Section 3
workers, or may establish multiple
benchmarks based on geography, the
type of public housing financial
assistance, or other variables. The
proposed rule also notes that in
establishing the benchmarks, HUD may
consider the industry averages worked
by specific categories of workers or in
different localities or regions; prior
Section 3 reports by recipients; and any
other factors HUD deems important. In
establishing the Section 3 benchmarks,
HUD would exclude professional
services, which would be defined as
non-construction services, including,
but not limited to, contracts for legal
services, financial consulting,
accounting services, environmental
assessment, architectural services, and
civil engineering services. Lastly, HUD
commits to updating the benchmarks no
less frequently than once every three
years through notice, subject to public
comment, in the Federal Register.
HUD created the concept of a Section
3 worker and Targeted Section 3 worker
so that HUD could track and set
benchmarks to target selected categories
of workers and to recognize the
statutory requirements pertaining to
contracting opportunities for business
concerns employing low- and very-low
income persons.
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HUD would define a Section 3 worker
for both public housing financial
assistance and Section 3 projects as a
worker that meets one of the following:
• The worker’s income is below the
income limit established by HUD;
• The worker lives in a qualified
census tract; or
• The worker is employed by a
Section 3 business concern.
HUD would define a Targeted Section
3 worker differently for public housing
financial assistance and Section 3
projects. For public housing financial
assistance, Targeted Section 3 workers
would be:
• Workers employed by a Section 3
business concern;
• Current residents of public housing
or Section 8 assisted housing;
• Residents of other projects managed
by the PHA that is expending assistance;
or
• Current YouthBuild participants.
For Section 3 projects, Targeted
Section 3 workers would be:
• Workers employed by a Section 3
business concern;
• Section 3 workers living within the
service area or neighborhood of the
project; or
• Current YouthBuild participants.
HUD proposes to define a Section 3
business concern as a business concern
that meets one of the following
requirements:
• It is at least 51 percent owned by
low- or very low-income persons;
• Over 75 percent of the labor hours
performed for the business are
performed by low- or very low-income
persons; or
• It is a business at least 25 percent
owned by current public housing
residents or residents who currently live
in Section 8-assisted housing.
For more information about the
proposed rule, HUD refers readers to the
proposed rule published elsewhere in
this issue of the Federal Register.
and
(2) Five (5) percent or more of the
total number of labor hours worked by
all workers employed with public
housing financial assistance in the
PHA’s or other recipient’s fiscal year are
Targeted Section 3 workers, as defined
at proposed § 75.11.
Alternative 2
For meeting the safe harbor in
proposed § 75.13, PHAs and other
recipients that certify to following the
prioritization in proposed § 75.9 and
meet or exceed the following Section 3
benchmarks will be considered to have
complied with requirements in
proposed 24 CFR part 75, subpart B, in
the absence of evidence to the contrary:
(1) Thirty (30) percent or more of the
total number of new hires employed
with public housing financial assistance
in the PHA’s or other recipient’s fiscal
year are Section 3 workers;
and
(2) Five (5) percent or more of the
total number of new hires employed
with public housing financial assistance
in the PHA’s or other recipient’s fiscal
year are Targeted Section 3 workers, as
defined at proposed § 75.11.
Public Housing Financial Assistance
Alternative 1
For meeting the safe harbor in
proposed § 75.13, PHAs and other
recipients that certify to following the
prioritization of effort in proposed
§ 75.9 and meet or exceed the following
Section 3 benchmarks will be
considered to have complied with
requirements in proposed 24 CFR part
75, subpart B, in the absence of
evidence to the contrary:
(1) Twenty-five (25) percent or more
of the total number of labor hours
worked by all workers employed with
public housing financial assistance in
the PHA’s or other recipient’s fiscal year
are Section 3 workers;
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II. This Document
This document proposes the
benchmarks for both public housing
financial assistance and Section 3
projects consistent with the proposed
rule. HUD is seeking comment on both
the benchmarks numbers themselves
and the methodology for determining
the benchmarks. HUD is proposing the
same benchmarks for all public housing
financial assistance and Section 3
projects. Once HUD has more data, it
may determine whether different
benchmarks are appropriate. The
following benchmarks would apply:
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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules
Section 3 Project
following Section 3 benchmarks will be
considered to have complied with
requirements in proposed 24 CFR part
75, subpart C, in the absence of
evidence to the contrary:
(1) Twenty-five (25) percent or more
of the total number of labor hours
worked by all workers on a Section 3
project are Section 3 workers;
and
(2) Five (5) percent or more of the
total number of labor hours worked by
all workers on a Section 3 project are
Targeted Section 3 workers, as defined
at proposed § 75.21.
The Methodology
To determine the initial proposed
benchmark figures, HUD looked at the
total hours worked on a construction or
development project, the total number
of workers that would likely qualify as
Section 3 workers, and the potential
pool of Targeted Section 3 workers. For
setting the total ratio for Section 3
workers/all total labor hours for those
employed in on-site construction jobs,
HUD considered workers in the
construction trades employed by the
construction industry (IndustryOccupation Matrix for Industry NAICS
230000 and Occupations in
Construction and Extraction Summary
level 47–0000). Although the
construction industry employs a
diversity of types of occupations (such
as administration), only on-site jobs are
covered by Section 3. Generally,
construction trades are paid higher
wages than the average occupation. For
the purpose of analysis, HUD defines a
low-income job as one earning no more
than 80 percent of the median annual
wage. This definition is consistent with
HUD’s definition of a low-income
household, which is a household
earning no more than 80 percent of the
area median household income. The
median annual wage for all occupations
in the United States was $37,690 in
2017 according to the Occupational
Employment and Wage Estimates by the
Bureau of Labor Statistics (BLS); 80
percent of that is $30,152. The lowincome estimate of $30,152
approximates the upper end of the wage
distribution for Section 3 workers. HUD
considers all occupations with an
annual wage less than $30,152 as those
that could be filled by someone who is
low-income and meets the Section 3
requirements.
Data on occupations involved in onsite construction show that a very small
fraction of occupations are characterized
by a median less than the measure of
low-income ($30,152). That the wages of
construction occupations are higher
than average suggest that Section 3
workers will not earn the industry’s
median wage. Instead, a Section 3
worker is likely to be paid a wage that
is lower than the median wage (50th
percentile) for most industries. Earning
less than the median is reasonable for
recent hires who have less skills and
experience than the average worker.
Most occupations offer a wide
distribution of wages based on worker
productivity and other factors such as
location. For example, a construction
laborer earns a median salary of
$34,500, but can earn as much as
$63,400 (90th percentile annual wages),
or as little as $22,280 (10th percentile
annual wages).
For the Section 3 employment goal to
be attainable, the labor-hour threshold
must be set at a level that is congruent
with the labor market. Determining
whether it is reasonable to expect there
to be job openings for low-income
workers (80 percent of median income
across all occupations) requires
examining the lower end of the wage
distribution of the relevant industries.
Whether Section 3 workers are to
represent 25 percent of the labor hours
completed will depend upon the 25th
percentile level of wages.
For meeting the safe harbor in
proposed § 75.23, recipients that certify
to following the prioritization in
proposed § 75.19 and meet or exceed the
Industry
Occupation
All ........................................
Residential Construction .....
Residential Construction .....
Services to Buildings ..........
All ........................................
All ........................................
Construction and Extraction
All ........................................
10th percentile
25th percentile
19,970
24,590
25,130
18,830
24,770
32,200
32,000
21,610
Median
75th percentile
90th percentile
61,110
61,580
56,610
35,690
96,150
88,950
74,300
49,060
37,690
43,730
41,430
26,790
The 25th percentile wage for
construction occupations in the
residential construction industry is
$32,000, which is slightly above the
low-income measure of $30,152. The 25
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percent employment goal is achievable
because there are enough low-income
construction jobs in residential
construction. To achieve this goal,
however, will require a slight stretch.
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Either all of the low-income labor hours
will have to be allocated towards
Section 3 workers and/or a small
portion of the jobs above the 25th
percentile wage will have to be given to
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DISTRIBUTION OF ANNUAL WAGES FOR FULL-TIME WORKERS
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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules
Section 3 workers. Examples of lowincome construction occupations
include helpers, cleaners, construction
laborers, landscapers, carpet installers,
roofers, and floor sanders.
Section 3 applies to other activities
than on-site construction employment,
all of which should be evaluated in the
same manner to ascertain whether there
is sufficient demand for low-income
labor. The most prominent is the
Operating Fund for PHAs, accounting
for over 40 percent of all Section 3 new
hires in 2017. Section 3 workers for
PHAs are likely to be employed in
occupations within the ‘‘Services to
Buildings and Dwellings’’ industry.
Most of the employment in the services
to buildings industry is in occupations
with a median wage below the lowincome annual wage. The lowestincome occupations include janitors,
housekeepers, refuse collectors,
receptionists, data entry keyers,
landscapers, office clerks, and file
clerks. Compared to the low-income
measure of $30,152, the median (50th
percentile) annual wage in building
services is $26,790, and the 25th
percentile wage is $21,610. The wage
distribution for building services is
more flexible than the one for on-site
construction because the wage
distribution for building services is
centered around low-income jobs. The
wage distribution of the building
services industry allows PHAs to offer
employment to workers with
intermediate skills (as well as lower
level) and to compensate them
appropriately.
Based on the above wage distribution
data for on-site construction and
building services, HUD sets the
threshold for Section 3 labor hours at 25
percent of all labor hours to encourage
recipients, subrecipients, contractors,
and subcontractors to hire more Section
3 workers for construction. In both
industries, the 25th percentile annual
wage for that industry is either close to
or below the upper boundary for lowincome.
For the new hire alternative for public
housing financial assistance, HUD
proposes that the initial threshold for
Section 3 hires as a percentage of all
hires would be 30 percent, which is a
figure comparable to that in HUD’s
currently codified Section 3 regulations.
To establish a Targeted Section 3
benchmark for public housing financial
assistance projects, HUD estimated the
number of residents of public housing
or Section 8 assisted housing, of current
YouthBuild participants, and of workers
employed by Section 3 business
concerns. Excluding children, the
elderly, and persons with disabilities,
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there are around 2.4 million potential
workers living in public housing or
Section 8 assisted housing across the
country’s 2,934 PHAs. Because small
PHAs, those with less than 250 units,
make up the majority of PHAs and
because of their size would have a small
number of potential workers, HUD
believes that the majority of the 2.4
million potential workers would be
concentrated at the larger PHAs, where
approximately 2,000 potential workers
per large PHA could be hired by
recipients, subrecipients, contractors, or
subcontractors. Another pool of workers
is current YouthBuild workers.
Currently, approximately 8,000 youth
between the ages of 18 and 24 are
selected to enroll in the YouthBuild
program each year.1 While some of
these workers may be working on
specific projects for YouthBuild and,
thus, are not available to be hired as a
Targeted Section 3 worker, the rule
provides for current or previous
YouthBuild workers; therefore, this
number would be expanded. Lastly, the
Targeted Section 3 worker for a Section
3 benchmark includes workers that are
employed by Section 3 business
concerns, regardless of where the
business is located. Based on the data in
HUD’s Section 3 business Registry, there
is an ample number of Section 3
business concerns. HUD, therefore,
believes given the multitude of available
workers that recipients, contractors, or
subcontractors can find to meet the
Targeted Section 3 benchmark, that 5
percent is a reasonable goal for the first
Targeted Section 3 benchmark.
Targeted workers constitute one-fifth
(5 percent/25 percent) of the proposed
goals. To ensure that 5 percent of local
workers is not a burdensome goal for
employers, HUD refers to data on
commuting times from the U.S. Census.
For 5 percent to be easily attainable, the
journey to work must be a short one for
one-fifth of all workers. The travel time
to work is less than 10 minutes for 12.7
percent of all workers; and less than 15
minutes for 26.3 percent of all workers.
The distribution of travel times
indicates that the Section 3 Targeted
worker goal is attainable, but that the
goal may require a slight stretch.
However, a slight stretch is welcome
given that the purpose of Targeted
worker definition is to provide local
employment to those workers who are
low-income and typically have longer
commutes.
1 See About YouthBuild, YouthBuild.com,
https://www.youthbuild.org/about-youthbuild-usa
(last visited June 19, 2018).
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TRAVEL TIME TO WORK, 2013–2017
Minutes
Less than 10 minutes
10 to 14 minutes .......
15 to 19 minutes .......
20 to 24 minutes .......
25 to 29 minutes .......
30 to 34 minutes .......
35 to 44 minutes .......
45 to 59 minutes .......
60 or more minutes ...
Mean Travel time
(minutes) ................
Percentage
of workers
Cumulative
percentage *
12.7
13.6
15.3
14.6
6.4
13.7
6.8
8.1
8.9
12.7
26.3
41.6
56.2
62.6
76.3
83.1
91.2
100.1
26.4
......................
*Total is greater than 100 percent due to rounding
of percentages.
Source: U.S. Census, 2013–2017 American Community Survey 5-Year Estimates.
As for Section 3 projects, HUD
proposes the same fraction of 5 percent.
HUD looked at nearly 3,000 past
Community Development Block Grant
program (CDBG) and HOME Investment
Partnership Program (HOME) projects in
diverse geographic regions with at least
$200,000 in funding to estimate the
number of potential Targeted Section 3
workers available for Section 3 projects.
For those that fall into the first category,
based on geographic proximity to the
project site, HUD looked at the number
of low-income persons and all persons
living in qualified census tracts within
the local area, and the percentage of
population that is working age (to
exclude the elderly and children). HUD
data shows that a median of 4,627
potential Targeted Section 3 workers
live in the local areas associated with
the sample of housing and community
development projects. HUD notes that
the use of geographic proximity to
define the local area means that there
could be significant deviation among
the number of Targeted Section 3
workers available for different projects.
The number of potential Targeted
Section 3 workers in the geographically
diverse sample of CDBG and HOME
projects ranged from a minimum under
500 to a maximum over 125,000.
Targeted Section 3 workers for Section
3 projects also include current
YouthBuild workers and workers
employed by Section 3 business
concerns to meet the Targeted Section 3
worker benchmark. While the estimated
pool of potential Targeted Section 3
workers seems larger for Section 3
projects than for public housing
financial assistance, HUD believes that
given the large fluctuation of the
number of available workers for Section
3 projects, the Section 3 project
benchmark for Targeted Section 3
workers should initially also be 5
percent.
E:\FR\FM\04APP1.SGM
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13204
Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules
Dated: March 29, 2019.
Matthew F. Hunter,
Assistant Deputy Secretary for Field Policy
and Management.
[FR Doc. 2019–06564 Filed 4–3–19; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF EDUCATION
34 CFR Chapter II
RIN 1855–AA14
[Docket ID ED–2018–OII–0062]
Proposed Priorities, Requirements,
Definitions, and Selection Criteria—
Expanding Opportunity Through
Quality Charter Schools Program;
Grants to Charter School Developers
for the Opening of New Charter
Schools and for the Replication and
Expansion of High-Quality Charter
Schools
Office of Elementary and
Secondary Education, Department of
Education.
ACTION: Proposed priorities,
requirements, definitions, and selection
criteria.
AGENCY:
The Assistant Secretary for
Elementary and Secondary Education
proposes priorities, requirements,
definitions, and selection criteria for
Grants to Charter School Developers for
the Opening of New Charter Schools
and for the Replication and Expansion
of High-Quality Charter Schools
(Developer grants) under the Expanding
Opportunity Through Quality Charter
Schools Program (CSP), Catalog of
Federal Domestic Assistance (CFDA)
numbers 84.282B and 84.282E,
respectively. We may use one or more
of these priorities, requirements,
definitions, and selection criteria for
competitions in fiscal year (FY) 2019
and later years. We take this action to
support the opening of new charter
schools (CFDA 84.282B) and the
replication and expansion of highquality charter schools (CFDA 84.282E)
throughout the Nation, particularly
those that serve educationally
disadvantaged students, such as
students who are individuals from lowincome families, and students who
traditionally have been underserved by
charter schools, such as Native
American students and students in rural
communities.
DATES: We must receive your comments
on or before May 6, 2019.
ADDRESSES: Submit your comments
through the Federal eRulemaking Portal
or via postal mail, commercial delivery,
or hand delivery. We will not accept
jbell on DSK30RV082PROD with PROPOSALS
SUMMARY:
VerDate Sep<11>2014
16:38 Apr 03, 2019
Jkt 247001
comments submitted by fax or by email
or those submitted after the comment
period. To ensure that we do not receive
duplicate copies, please submit your
comments only once. In addition, please
include the Docket ID at the top of your
comments.
• Federal eRulemaking Portal: Go to
www.regulations.gov to submit your
comments electronically. Information
on using Regulations.gov, including
instructions for accessing agency
documents, submitting comments, and
viewing the docket, is available on the
site under ‘‘Help.’’
• Postal Mail, Commercial Delivery,
or Hand Delivery: If you mail or deliver
your comments, address them to
Katherine Cox, U.S. Department of
Education, 400 Maryland Avenue SW,
Room 3E207, Washington, DC 20202–
5970.
Privacy Note: The Department’s
policy is to make all comments received
from members of the public available for
public viewing in their entirety on the
Federal eRulemaking Portal at
www.regulations.gov. Therefore,
commenters should be careful to
include in their comments only
information that they wish to make
publicly available.
FOR FURTHER INFORMATION CONTACT:
Katherine Cox, U.S. Department of
Education, 400 Maryland Avenue SW,
Room 3E207, Washington, DC 20202–
5970. Telephone: (202) 453–6886.
Email: charterschools@ed.gov.
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1–800–877–
8339.
SUPPLEMENTARY INFORMATION:
Invitation to Comment: We invite you
to submit comments regarding the
proposed priorities, requirements,
definitions, and selection criteria. To
ensure that your comments have
maximum effect in developing the
notice of final priorities, requirements,
definitions, and selection criteria, we
urge you to identify clearly the
proposed priority, requirement,
definition, or selection criterion that
each comment addresses.
We invite you to assist us in
complying with the specific
requirements of Executive Orders
12866, 13563, and 13771 and their
overall requirement of reducing
regulatory burden that might result from
these proposed priorities, requirements,
definitions, and selection criteria. Please
let us know of any further ways we
could reduce potential costs or increase
potential benefits while preserving the
PO 00000
Frm 00062
Fmt 4702
Sfmt 4702
effective and efficient administration of
this program.
During and after the comment period,
you may inspect all public comments
about the proposed priorities,
requirements, definitions, and selection
criteria by accessing Regulations.gov.
You may also inspect the comments in
person at 400 Maryland Avenue SW,
Room 3E207, Washington, DC, between
the hours of 8:30 a.m. and 4:00 p.m.,
Eastern Time, Monday through Friday
of each week except Federal holidays.
Assistance to Individuals with
Disabilities in Reviewing the
Rulemaking Record: On request, we will
provide an appropriate accommodation
or auxiliary aid to an individual with a
disability who needs assistance to
review the comments or other
documents in the public rulemaking
record for the proposed priorities,
requirements, definitions, and selection
criteria. If you want to schedule an
appointment for this type of
accommodation or auxiliary aid, please
contact the person listed under FOR
FURTHER INFORMATION CONTACT.
Purpose of Program: The major
purposes of the CSP are to expand
opportunities for all students,
particularly traditionally underserved
students, to attend charter schools and
meet challenging State academic
standards; provide financial assistance
for the planning, program design, and
initial implementation of public charter
schools; increase the number of highquality charter schools available to
students across the United States;
evaluate the impact of charter schools
on student achievement, families, and
communities; share best practices
between charter schools and other
public schools; encourage States to
provide facilities support to charter
schools; and support efforts to
strengthen the charter school
authorizing process.
Developer grants are intended to
support charter schools that serve early
childhood, elementary school, or
secondary school students by providing
grant funds to eligible applicants for the
opening of new charter schools (CFDA
number 84.282B) and for the replication
and expansion of high-quality charter
schools (CFDA number 84.282E).
Program Authority: Title IV, part C of
the Elementary and Secondary
Education Act of 1965, as amended
(ESEA) (20 U.S.C. 7221–7221j).
Proposed Priorities
This document contains seven
proposed priorities.
E:\FR\FM\04APP1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 65 (Thursday, April 4, 2019)]
[Proposed Rules]
[Pages 13199-13204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06564]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 75
[Docket No. FR-6085-N-02]
Section 3 Benchmarks for Creating Economic Opportunities for Low-
and Very Low-Income Persons and Eligible Businesses
AGENCY: Office of the Assistant Deputy Secretary for Field Policy and
Management, HUD.
ACTION: Notification of proposed benchmarks.
-----------------------------------------------------------------------
SUMMARY: Section 3 of the Housing and Urban Development Act of 1968, as
amended by the Housing and Community Development Act of 1992 (Section
3), contributes to the establishment of stronger, more sustainable
communities by ensuring that employment and other economic
opportunities generated by Federal financial assistance for housing and
community development programs are, to the greatest extent feasible,
directed toward low- and very low-income persons, particularly those
who are recipients of government assistance for housing. HUD is
statutorily charged with the authority and responsibility to implement
and enforce Section 3. Elsewhere in this issue of the Federal Register,
HUD published a proposed rule that would amend the Section 3
regulations to, among other things, increase the impact of the Section
3 requirements, and streamline and update HUD's reporting and tracking
requirements. The proposed rule includes a requirement that HUD set
Section 3 benchmarks by publishing a notification, subject to public
comment, in the Federal Register. The proposed rule provides that HUD
will set benchmarks based on the number of Section 3 workers and a
subset of Section 3 workers, defined as Targeted Section 3 workers. If
a recipient complies with the statutory priorities regarding effort and
meets the outcome benchmarks, HUD would presume the recipient is
following Section 3 requirements, absent evidence to the contrary.
These proposed outcome benchmarks are being published concurrently with
the proposed rule so the public can comment on the proposed benchmarks
and methodology for setting the benchmarks prior to adoption of the
final rule and benchmarks.
DATES: Comment Due Date. June 3, 2019.
ADDRESSES: Interested persons are invited to submit comments regarding
this document to the Regulations Division, Office of General Counsel,
451 7th Street SW, Room 10276, Department of Housing and Urban
Development, Washington, DC 20410-0500. Communications must refer to
the above docket number and title. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted 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.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
www.regulations.gov. HUD strongly encourages commenters to submit
comments electronically. Electronic submission of comments allows the
commenter maximum time to prepare and submit comments, ensures timely
receipt by HUD, and enables HUD to make them immediately available to
the public. Comments submitted electronically through the
www.regulations.gov website can be viewed by other commenters and
interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
[[Page 13200]]
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying weekdays between 8 a.m. and 5 p.m.
Eastern Time at the above address. Due to security measures at the HUD
Headquarters building, an advance appointment to review the public
comments must be scheduled by calling the Regulations Division at 202-
708-3055 (this is not a toll-free number). Individuals with speech or
hearing impairments may access this number through TTY by calling the
Federal Relay Service at 800-877-8339. Copies of all comments submitted
are available for inspection and downloading at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Alastair W. McFarlane, Director,
Economic Development and Public Finance Division, Office of Policy
Development and Research, Department of Housing and Urban Development,
451 7th Street SW, Room 8216, Washington, DC 20410; telephone 202-402-
5845 (voice/TDD) (this is not a toll-free number). Persons with hearing
or speech impairments may access this number through TTY by calling the
Federal Relay Service, at toll-free, 800-877-8339. General email
inquiries regarding Section 3 may be sent to: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Section 3 of the Housing and Urban Development Act of 1968 (Pub. L.
90-448, approved August 1, 1968) (Section 3) (12 U.S.C. 1701u) was
enacted for the purpose of ensuring, to the greatest extent feasible,
that economic opportunities generated by the expenditure of certain HUD
financial assistance are directed to low- and very low-income persons,
particularly those who receive Federal financial assistance for housing
and those residing in communities where the financial assistance is
expended. HUD issued Section 3 regulations through an interim rule
published on June 30, 1994, at 59 FR 33880, and the regulations are
codified in 24 CFR part 135. The Section 3 regulations at 24 CFR 135.30
currently require that Section 3 covered public and Indian housing
programs and other HUD programs that are covered by Section 3 meet a
numerical goal of 30 percent of the aggregate number of new hires for a
1-year period in order to meet a compliance safe harbor. For contracts
awarded in connection with Section 3 projects and activities, the
current rule also applies the following goals for each recipient,
contractor, and subcontractor to commit to award to Section 3 business
concerns: (1) At least 10 percent of the total dollar amount of all
Section 3 covered contracts for building trades work for maintenance,
repair, modernization, or development of public or Indian housing, or
for building trades work arising in connection with housing
rehabilitation, housing construction, and other public construction;
and (2) at least 3 percent of the total dollar amount of all other
Section 3 covered contracts. Based on HUD's experience with
implementing the program over the 24 years that have passed since HUD
promulgated the currently codified Section 3 regulations, HUD is
proposing to issue new regulations to strengthen and streamline the
Section 3 requirements.
HUD issued a proposed rule, found elsewhere in this issue of the
Federal Register, that would replace the current 24 CFR part 135
regulations with new Section 3 regulations in 24 CFR part 75. The new
regulations aim to make Section 3 goals and reporting more meaningful
and more aligned with statutory requirements, and to make compliance
easier for recipients. This proposed rule also includes new metrics for
compliance safe harbors and provides that these benchmarks will be set
by notification in the Federal Register. The rule separates out the new
requirements and benchmarks by the type of funding, as follows:
(1) Public housing program: Subpart B, Additional Provisions for
Public Housing Financial Assistance, covers development assistance
provided pursuant to section 5 of the U.S. Housing Act of 1937 (1937
Act) and Operating Fund and Capital Fund assistance provided pursuant
to section 9 of the 1937 Act, collectively; these are defined as public
housing financial assistance in the proposed rule.
(2) Other HUD programs: Subpart C, Additional Provisions for
Section 3 Projects, covers housing rehabilitation, housing
construction, and other public construction projects assisted under HUD
programs that provide housing and community development financial
assistance when the amount of assistance to the project exceeds a
threshold of $200,000, and is defined as a Section 3 project. This
threshold will not apply to assistance from HUD's Lead Hazard Control
and Healthy Homes programs.
As for new metrics, the rule provides that HUD will establish,
through a Federal Register notification, Section 3 benchmarks by
setting forth one or both of the following:
(1) The number of labor hours worked by Section 3 workers divided
by the total number of labor hours worked by all workers in the
recipient's fiscal year.
(2) The number of labor hours worked by Targeted Section 3 workers
divided by the total number of labor hours worked by all workers in the
recipient's fiscal year.
HUD also provides an alternative, titled Alternative 2, in the
proposed rule that would provide for using new hires, as opposed to
labor hours, to track Section 3 workers and Targeted Section 3 workers
for public housing financial assistance (i.e., public housing
authorities (PHAs) and other recipients of public housing financial
assistance). In the final rule, HUD will adopt either the use of labor
hours, Alternative 1, or new hires, Alternative 2, for public housing
financial assistance.
The proposed rule explains how HUD plans to determine these
benchmarks, noting that it may establish a single nationwide benchmark
for work performed by Section 3 workers and a single nationwide
benchmark for work performed by Targeted Section 3 workers, or may
establish multiple benchmarks based on geography, the type of public
housing financial assistance, or other variables. The proposed rule
also notes that in establishing the benchmarks, HUD may consider the
industry averages worked by specific categories of workers or in
different localities or regions; prior Section 3 reports by recipients;
and any other factors HUD deems important. In establishing the Section
3 benchmarks, HUD would exclude professional services, which would be
defined as non-construction services, including, but not limited to,
contracts for legal services, financial consulting, accounting
services, environmental assessment, architectural services, and civil
engineering services. Lastly, HUD commits to updating the benchmarks no
less frequently than once every three years through notice, subject to
public comment, in the Federal Register.
HUD created the concept of a Section 3 worker and Targeted Section
3 worker so that HUD could track and set benchmarks to target selected
categories of workers and to recognize the statutory requirements
pertaining to contracting opportunities for business concerns employing
low- and very-low income persons.
[[Page 13201]]
HUD would define a Section 3 worker for both public housing
financial assistance and Section 3 projects as a worker that meets one
of the following:
The worker's income is below the income limit established
by HUD;
The worker lives in a qualified census tract; or
The worker is employed by a Section 3 business concern.
HUD would define a Targeted Section 3 worker differently for public
housing financial assistance and Section 3 projects. For public housing
financial assistance, Targeted Section 3 workers would be:
Workers employed by a Section 3 business concern;
Current residents of public housing or Section 8 assisted
housing;
Residents of other projects managed by the PHA that is
expending assistance; or
Current YouthBuild participants.
For Section 3 projects, Targeted Section 3 workers would be:
Workers employed by a Section 3 business concern;
Section 3 workers living within the service area or
neighborhood of the project; or
Current YouthBuild participants.
HUD proposes to define a Section 3 business concern as a business
concern that meets one of the following requirements:
It is at least 51 percent owned by low- or very low-income
persons;
Over 75 percent of the labor hours performed for the
business are performed by low- or very low-income persons; or
It is a business at least 25 percent owned by current
public housing residents or residents who currently live in Section 8-
assisted housing.
For more information about the proposed rule, HUD refers readers to
the proposed rule published elsewhere in this issue of the Federal
Register.
II. This Document
This document proposes the benchmarks for both public housing
financial assistance and Section 3 projects consistent with the
proposed rule. HUD is seeking comment on both the benchmarks numbers
themselves and the methodology for determining the benchmarks. HUD is
proposing the same benchmarks for all public housing financial
assistance and Section 3 projects. Once HUD has more data, it may
determine whether different benchmarks are appropriate. The following
benchmarks would apply:
Public Housing Financial Assistance
Alternative 1
For meeting the safe harbor in proposed Sec. 75.13, PHAs and other
recipients that certify to following the prioritization of effort in
proposed Sec. 75.9 and meet or exceed the following Section 3
benchmarks will be considered to have complied with requirements in
proposed 24 CFR part 75, subpart B, in the absence of evidence to the
contrary:
(1) Twenty-five (25) percent or more of the total number of labor
hours worked by all workers employed with public housing financial
assistance in the PHA's or other recipient's fiscal year are Section 3
workers;
[GRAPHIC] [TIFF OMITTED] TP04AP19.011
and
(2) Five (5) percent or more of the total number of labor hours
worked by all workers employed with public housing financial assistance
in the PHA's or other recipient's fiscal year are Targeted Section 3
workers, as defined at proposed Sec. 75.11.
[GRAPHIC] [TIFF OMITTED] TP04AP19.012
Alternative 2
For meeting the safe harbor in proposed Sec. 75.13, PHAs and other
recipients that certify to following the prioritization in proposed
Sec. 75.9 and meet or exceed the following Section 3 benchmarks will
be considered to have complied with requirements in proposed 24 CFR
part 75, subpart B, in the absence of evidence to the contrary:
(1) Thirty (30) percent or more of the total number of new hires
employed with public housing financial assistance in the PHA's or other
recipient's fiscal year are Section 3 workers;
[GRAPHIC] [TIFF OMITTED] TP04AP19.013
and
(2) Five (5) percent or more of the total number of new hires
employed with public housing financial assistance in the PHA's or other
recipient's fiscal year are Targeted Section 3 workers, as defined at
proposed Sec. 75.11.
[GRAPHIC] [TIFF OMITTED] TP04AP19.014
[[Page 13202]]
Section 3 Project
For meeting the safe harbor in proposed Sec. 75.23, recipients
that certify to following the prioritization in proposed Sec. 75.19
and meet or exceed the following Section 3 benchmarks will be
considered to have complied with requirements in proposed 24 CFR part
75, subpart C, in the absence of evidence to the contrary:
(1) Twenty-five (25) percent or more of the total number of labor
hours worked by all workers on a Section 3 project are Section 3
workers;
[GRAPHIC] [TIFF OMITTED] TP04AP19.015
and
(2) Five (5) percent or more of the total number of labor hours
worked by all workers on a Section 3 project are Targeted Section 3
workers, as defined at proposed Sec. 75.21.
[GRAPHIC] [TIFF OMITTED] TP04AP19.016
The Methodology
To determine the initial proposed benchmark figures, HUD looked at
the total hours worked on a construction or development project, the
total number of workers that would likely qualify as Section 3 workers,
and the potential pool of Targeted Section 3 workers. For setting the
total ratio for Section 3 workers/all total labor hours for those
employed in on-site construction jobs, HUD considered workers in the
construction trades employed by the construction industry (Industry-
Occupation Matrix for Industry NAICS 230000 and Occupations in
Construction and Extraction Summary level 47-0000). Although the
construction industry employs a diversity of types of occupations (such
as administration), only on-site jobs are covered by Section 3.
Generally, construction trades are paid higher wages than the average
occupation. For the purpose of analysis, HUD defines a low-income job
as one earning no more than 80 percent of the median annual wage. This
definition is consistent with HUD's definition of a low-income
household, which is a household earning no more than 80 percent of the
area median household income. The median annual wage for all
occupations in the United States was $37,690 in 2017 according to the
Occupational Employment and Wage Estimates by the Bureau of Labor
Statistics (BLS); 80 percent of that is $30,152. The low-income
estimate of $30,152 approximates the upper end of the wage distribution
for Section 3 workers. HUD considers all occupations with an annual
wage less than $30,152 as those that could be filled by someone who is
low-income and meets the Section 3 requirements.
Data on occupations involved in on-site construction show that a
very small fraction of occupations are characterized by a median less
than the measure of low-income ($30,152). That the wages of
construction occupations are higher than average suggest that Section 3
workers will not earn the industry's median wage. Instead, a Section 3
worker is likely to be paid a wage that is lower than the median wage
(50th percentile) for most industries. Earning less than the median is
reasonable for recent hires who have less skills and experience than
the average worker. Most occupations offer a wide distribution of wages
based on worker productivity and other factors such as location. For
example, a construction laborer earns a median salary of $34,500, but
can earn as much as $63,400 (90th percentile annual wages), or as
little as $22,280 (10th percentile annual wages).
For the Section 3 employment goal to be attainable, the labor-hour
threshold must be set at a level that is congruent with the labor
market. Determining whether it is reasonable to expect there to be job
openings for low-income workers (80 percent of median income across all
occupations) requires examining the lower end of the wage distribution
of the relevant industries. Whether Section 3 workers are to represent
25 percent of the labor hours completed will depend upon the 25th
percentile level of wages.
Distribution of Annual Wages for Full-Time Workers
--------------------------------------------------------------------------------------------------------------------------------------------------------
10th 25th 75th 90th
Industry Occupation percentile percentile Median percentile percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
All....................................... All......................... 19,970 24,770 37,690 61,110 96,150
Residential Construction.................. All......................... 24,590 32,200 43,730 61,580 88,950
Residential Construction.................. Construction and Extraction. 25,130 32,000 41,430 56,610 74,300
Services to Buildings..................... All......................... 18,830 21,610 26,790 35,690 49,060
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Bureau of Labor Statistics, May 2017 National Occupational Employment and Wage Estimates, United States.
The 25th percentile wage for construction occupations in the
residential construction industry is $32,000, which is slightly above
the low-income measure of $30,152. The 25 percent employment goal is
achievable because there are enough low-income construction jobs in
residential construction. To achieve this goal, however, will require a
slight stretch. Either all of the low-income labor hours will have to
be allocated towards Section 3 workers and/or a small portion of the
jobs above the 25th percentile wage will have to be given to
[[Page 13203]]
Section 3 workers. Examples of low-income construction occupations
include helpers, cleaners, construction laborers, landscapers, carpet
installers, roofers, and floor sanders.
Section 3 applies to other activities than on-site construction
employment, all of which should be evaluated in the same manner to
ascertain whether there is sufficient demand for low-income labor. The
most prominent is the Operating Fund for PHAs, accounting for over 40
percent of all Section 3 new hires in 2017. Section 3 workers for PHAs
are likely to be employed in occupations within the ``Services to
Buildings and Dwellings'' industry. Most of the employment in the
services to buildings industry is in occupations with a median wage
below the low-income annual wage. The lowest-income occupations include
janitors, housekeepers, refuse collectors, receptionists, data entry
keyers, landscapers, office clerks, and file clerks. Compared to the
low-income measure of $30,152, the median (50th percentile) annual wage
in building services is $26,790, and the 25th percentile wage is
$21,610. The wage distribution for building services is more flexible
than the one for on-site construction because the wage distribution for
building services is centered around low-income jobs. The wage
distribution of the building services industry allows PHAs to offer
employment to workers with intermediate skills (as well as lower level)
and to compensate them appropriately.
Based on the above wage distribution data for on-site construction
and building services, HUD sets the threshold for Section 3 labor hours
at 25 percent of all labor hours to encourage recipients,
subrecipients, contractors, and subcontractors to hire more Section 3
workers for construction. In both industries, the 25th percentile
annual wage for that industry is either close to or below the upper
boundary for low-income.
For the new hire alternative for public housing financial
assistance, HUD proposes that the initial threshold for Section 3 hires
as a percentage of all hires would be 30 percent, which is a figure
comparable to that in HUD's currently codified Section 3 regulations.
To establish a Targeted Section 3 benchmark for public housing
financial assistance projects, HUD estimated the number of residents of
public housing or Section 8 assisted housing, of current YouthBuild
participants, and of workers employed by Section 3 business concerns.
Excluding children, the elderly, and persons with disabilities, there
are around 2.4 million potential workers living in public housing or
Section 8 assisted housing across the country's 2,934 PHAs. Because
small PHAs, those with less than 250 units, make up the majority of
PHAs and because of their size would have a small number of potential
workers, HUD believes that the majority of the 2.4 million potential
workers would be concentrated at the larger PHAs, where approximately
2,000 potential workers per large PHA could be hired by recipients,
subrecipients, contractors, or subcontractors. Another pool of workers
is current YouthBuild workers. Currently, approximately 8,000 youth
between the ages of 18 and 24 are selected to enroll in the YouthBuild
program each year.\1\ While some of these workers may be working on
specific projects for YouthBuild and, thus, are not available to be
hired as a Targeted Section 3 worker, the rule provides for current or
previous YouthBuild workers; therefore, this number would be expanded.
Lastly, the Targeted Section 3 worker for a Section 3 benchmark
includes workers that are employed by Section 3 business concerns,
regardless of where the business is located. Based on the data in HUD's
Section 3 business Registry, there is an ample number of Section 3
business concerns. HUD, therefore, believes given the multitude of
available workers that recipients, contractors, or subcontractors can
find to meet the Targeted Section 3 benchmark, that 5 percent is a
reasonable goal for the first Targeted Section 3 benchmark.
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\1\ See About YouthBuild, YouthBuild.com, https://www.youthbuild.org/about-youthbuild-usa (last visited June 19,
2018).
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Targeted workers constitute one-fifth (5 percent/25 percent) of the
proposed goals. To ensure that 5 percent of local workers is not a
burdensome goal for employers, HUD refers to data on commuting times
from the U.S. Census. For 5 percent to be easily attainable, the
journey to work must be a short one for one-fifth of all workers. The
travel time to work is less than 10 minutes for 12.7 percent of all
workers; and less than 15 minutes for 26.3 percent of all workers. The
distribution of travel times indicates that the Section 3 Targeted
worker goal is attainable, but that the goal may require a slight
stretch. However, a slight stretch is welcome given that the purpose of
Targeted worker definition is to provide local employment to those
workers who are low-income and typically have longer commutes.
Travel Time to Work, 2013-2017
------------------------------------------------------------------------
Percentage Cumulative
Minutes of workers percentage *
------------------------------------------------------------------------
Less than 10 minutes......................... 12.7 12.7
10 to 14 minutes............................. 13.6 26.3
15 to 19 minutes............................. 15.3 41.6
20 to 24 minutes............................. 14.6 56.2
25 to 29 minutes............................. 6.4 62.6
30 to 34 minutes............................. 13.7 76.3
35 to 44 minutes............................. 6.8 83.1
45 to 59 minutes............................. 8.1 91.2
60 or more minutes........................... 8.9 100.1
Mean Travel time (minutes)................... 26.4 ............
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*Total is greater than 100 percent due to rounding of percentages.
Source: U.S. Census, 2013-2017 American Community Survey 5-Year
Estimates.
As for Section 3 projects, HUD proposes the same fraction of 5
percent. HUD looked at nearly 3,000 past Community Development Block
Grant program (CDBG) and HOME Investment Partnership Program (HOME)
projects in diverse geographic regions with at least $200,000 in
funding to estimate the number of potential Targeted Section 3 workers
available for Section 3 projects. For those that fall into the first
category, based on geographic proximity to the project site, HUD looked
at the number of low-income persons and all persons living in qualified
census tracts within the local area, and the percentage of population
that is working age (to exclude the elderly and children). HUD data
shows that a median of 4,627 potential Targeted Section 3 workers live
in the local areas associated with the sample of housing and community
development projects. HUD notes that the use of geographic proximity to
define the local area means that there could be significant deviation
among the number of Targeted Section 3 workers available for different
projects. The number of potential Targeted Section 3 workers in the
geographically diverse sample of CDBG and HOME projects ranged from a
minimum under 500 to a maximum over 125,000. Targeted Section 3 workers
for Section 3 projects also include current YouthBuild workers and
workers employed by Section 3 business concerns to meet the Targeted
Section 3 worker benchmark. While the estimated pool of potential
Targeted Section 3 workers seems larger for Section 3 projects than for
public housing financial assistance, HUD believes that given the large
fluctuation of the number of available workers for Section 3 projects,
the Section 3 project benchmark for Targeted Section 3 workers should
initially also be 5 percent.
[[Page 13204]]
Dated: March 29, 2019.
Matthew F. Hunter,
Assistant Deputy Secretary for Field Policy and Management.
[FR Doc. 2019-06564 Filed 4-3-19; 8:45 am]
BILLING CODE 4210-67-P
