Monday, February 25, 2013

NBCC Letter To Chicago Mayor on HUD Section 3 Opportunities

Harry Alford
National Black Chamber of Commerce

Letter to the Mayor of Chicago 
February 21, 2013

Honorable Rahm Emanuel
Office of the Mayor
121 North LaSalle St, 4th Floor
Chicago, IL 60602

Re: Increasing Jobs / Decreasing Crime
Dear Mayor Emanuel:

Chicago has become the “Poster Child” for criminal violence. Your city is often in the news because of the never ending homicides. Most of the victims are youths or young adults. Many are crying out for an end to this carnage but no one seems to know the answer. We think the answer is obvious.

Bruce Weinberg, Professor at Ohio State University, states: “Public officials can put more cops on the beat, pass tougher sentencing laws, and take other steps to reduce crime, but there are limits to how much these can do…We found that a bad labor market has a profound impact on the crime rate.” The explanation of the violence happening in your crime zones is further explained in The Review of Economics and Statistics: “As wages go down and unemployment goes up, crime goes up – driving businesses and residents out of the community. This in turn causes more unemployment, which causes more crime – a ‘spiral dive’ situation from which it is difficult to recover.” That is what Chicago needs – jobs!

There is a way to address this need in neighborhoods with higher poverty rates. Simply implement Section 3 of the HUD Act (24CFR Part 135). Section 3 states that 30% of all new jobs from HUD funding are to go to people living in public housing or under the poverty level. Businesses that hire these Section 3 residents can be self-certified as Section 3 firms. Section 3 firms are allocated a 10% set aside for all contracts derived from HUD funding. If the Chicago Housing Authority alone would be compliant with this required law it would have let over $120 million in Section 3 contracts and created thousands of new Section 3 jobs during the past three years. This fact was found during a three year audit of CHA by HUD authorities. This audit came after some of our members filed a complaint against CHA. CHA is now entering into a Voluntary Compliance Agreement (VCA) with HUD. So, the timing is brilliant if your office ensures that CHA will start doing the right thing and begin hiring its residents and create and utilize Section 3 firms. 

Over the years, many agencies and divisions under the control of your office have received billions of dollars from HUD. However, none of these entities comply with Section 3 of the HUD Act. We know that from a Freedom of Information Act request via HUD. Think of how many jobs can be created and many people rising up from poverty thanks to the due diligence of their mayor. Mr. Mayor, you can do this. Demand compliance from your people and HUD will even come in and train them. Implement this program and watch the crime decrease on a monthly basis.

There will be very little “job shifting”. The majority of Section 3 workers will be taking jobs that are probably performed by people living outside the Chicago city limits. We did a review of the last Midway Airport expansion. Of course, there was a Project Labor Agreement on this expansion. The vast majority of the home zip codes of the workers were outside of Chicago. Many were outside of the Chicago Metropolitan Area and a noticeable number were out of state. Besides that, the Section 3 program is the LAW! One sweet day, Chicago will start complying and we pray that now will be that time. We trust in your leadership and wisdom. 

Section 3 of the HUD Act

Sir, if you do make this bold move and make Chicago the model city for Section 3 compliance, small business creation and a flourishing labor market, the National Black Chamber of Commerce will applaud this effort. We have 24 chapters within the state of Illinois. Our state chapter, the Illinois Black Chamber of Commerce, Larry Ivory – President/CEO, is ready to assist in the implementation of Section 3. We will give our chapters in the Chicago area technical assistance in showing public housing facilities how to organize and move as one progressive and organized network. HUD will provide assistance but is limited in its budget (for manpower). We are nonprofit with a mission to assist in projects like this. The NBCC is the largest Black business association in the world and we have been advocating the compliance of Section 3 since our beginning in 1993. Please do not hesitate in having your people contact our office. Here’s to a better Chicago.


Harry C. Alford

Cc: Larry Ivory, President/CEO, Illinois Black Chamber of Commerce
Mr. Alford is the co-founder, President/CEO of the National Black Chamber of Commerce®. 

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