Affirmative Action

Fair Housing

All CDBG grantees regardless of the type of project, are required to and must certify that they will "affirmatively further fair housing" at the time of application.  This requirement is in addition to the requirement to conduct projects in conformity with Title VI of the Civil Rights Act of 1964 (Public Law 88 352) and Title VIII of the Civil Rights Act of 1968 (Public Law 90  284, popularly known as the Fair Housing Act).  This means that grantees are not only prohibited from discriminating with respect to employment, program benefits and housing, but are also required to take "affirmative action" to promote fair housing for minorities and women in their communities.  

Documentation of all actions taken by grantee must be kept and reported in the Project Completion Report (PCR) at the time of close-out (See Chapter IX, Project Close-Out).  Merely posting fair housing posters in many cases is not considered substantive.

The following are some suggested actions that grantees may want to consider as ways to promote fair housing in their communities and thereby comply with the certification/requirement to take affirmative action in this regard.  Prior to trying to decide what actions to take, grantees are encouraged to identify the problems that minorities and women are having in securing housing of their choice in locations of their choice in the community (See Exhibit V-A).

• Post "equal housing opportunity" posters and/or decals in conspicuous places.  (In the case of a housing rehabilitation program, these posters/decals should be placed at the location(s) where applications for assistance are received.)
• Include information about fair housing in materials used to familiarize the community with local CDBG program services.
•  Include statements of fair housing policies in local CDBG program goals, objectives and administrative procedures.
• Use "equal housing opportunity" slogan and logo on official letterhead and in all printed materials related to the local CDBG program.
• Publish a summary of the provisions of Title VIII of the Civil Rights Act of 1968 (the "Fair Housing Act") in local newspapers.
• Sponsor fair housing seminars and campaigns.  The State Civil Rights Division website, can provide experienced trainers, as well as slide and video tape presentations, for local or regional fair housing workshops.
• Work with local real estate brokers to end any identified discriminatory practices and to post "equal housing opportunity" notices or decals.
• Work with local lending institutions to end identified "redlining" practices and to post "equal lending opportunity" notices.
• Work with minority and women leaders in the community to promote housing development and increase minority and female participation.
• Assist local Housing Authorities, builders, developers and property owners in developing outreach programs to attract minorities and females.
• Create and/or provide financial support for a local Housing Authority.
• Conduct special studies to ensure that minority and female housing needs are adequately identified.
• Review zoning ordinances and comprehensive plans to ensure that they promote spatial de-concentration of assisted housing units.
• Make local government owned property outside of areas of concentration available for the construction of assisted housing, particularly for large families.
• Designate a fair housing coordinator and publicize that the local government will assist persons experiencing discrimination in housing.  Such assistance can be in the form of facilitating the filing of a complaint with the State Civil Rights Commission/Division or the State Real Estate Commission.
• Provide housing counseling services which assist minorities and women seeking housing outside areas of concentration.
• Develop and adopt a Fair Housing Ordinance with identification of methods of enforcement
• Support fair share housing allocation plans.
• Adopt a code enforcement ordinance that compels landlords to keep their housing in safe and sanitary condition.
• If fair housing programs or services were previously instituted and are still available, publicize that these programs or services are available.

Affirmative Action - Employment, Training, Contracting, and Business Opportunities

Section 3: Local Employment, Training and Contracting

Section 3 is part of the Housing and Urban Development Act of 1968.  Its purpose is to ensure employment, training, contracting and other economic development opportunities for low income persons when federal dollars are expended.  Section 3 helps low-income residents gain the training, education and jobs needed to become self-sufficient.  For more information go to the HUD website.

Federal law requires, to the greatest extent feasible that at least 30% of all new hires should be Section 3 Residents and that:  1) opportunities for training and employment be given to lower income residents of the project area; and 2) contracts for work in connection with the project be awarded to businesses which are located in, or owned in substantial part by persons residing in the project area.  ("Project area” means the unit of local government or the metropolitan area or non-metropolitan county.  In non-entitlement, rural areas, the “”Project area” is defined by the grantee).

All CDBG Funded Projects must, to the greatest extent feasible, comply with Section 3 when contracting for professional and construction services. Section 3 applies to the entire project or activity regardless of whether it is fully or partially funded by HUD and should perform certain actions which include:

• notifying Section 3 residents and contractors about training, employment and contracting opportunities,
• including the Section 3 clause in all solicitations and contracts, ,(See Section VIII Exhibit J, Page 17, #56, Section 3 Clause)
• taking affirmative actions which will facilitate the training and employment of Section 3 residents and award compliance of contractors and subcontractors and refrain from entering into any contract with a contractor known to have violated the requirements of Section 3, obtaining compliance of contractors and refraining from entering into any contract with a contractor known to have violated the requirements of Section 3,
• documenting the actions taken to implement Section 3 requirements, the results of such actions and the impediments to implementing Section 3,
• reporting these actions with the Project Completion Report to the Department of Local Affairs.

Section 3 Project

For projects containing construction, conversion or rehabilitation of housing or other public construction, a Section 3 report must be prepared and submitted with the Project Completion Report.  Information on how to be compliant with Section 3 requirements can be found in Exhibit V-E.

All grantees are subject to Section 3 reporting regulation.  

The Section 3 report must be submitted to DOLA at the time of project close-out along with the Project Completion Report (PCR).

All data is to be submitted in the aggregate to reflect how many and what percentage of new hires were Section 3 residents for employment opportunities.  Federal law requires that “to the greatest extent feasible” at least 30% of new hires should be Section 3 Residents.

A community should be aware that Section 3 applies to its own employees as well.  Thus, if a grantee needs to fill any positions (whether public works employees or administrative staff) as a result of a Section 3 covered project, it must follow Section 3 guidelines and regulations.

The Section 3 Clause must be included in all contracts and must be discussed at the pre-construction conference and the pre-bid conference, if such is held.  Refer to Section VIII, Labor & Construction for further information.

Please contact your project manager for questions on Section 3 Requirements.

Executive Order 11246:  Equal Employment Opportunity

Another requirement briefly described above is Federal Executive Order 11246.  This requirement provides that no person shall be discriminated against on the basis of race, color, religion, sex, or national origin during the performance of federal or federally assisted construction contracts.  As specified in the Executive Order and the implementing regulations, contractors and subcontractors are required to take affirmative action to ensure fair treatment in employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.  Grantees are required to include in all construction contracts exceeding $10,000 a so called "Equal Opportunity Clause."  (This clause is contained in a sample contract in the Labor and Construction section of this Guide, Exhibit VIII-J. This clause requires contractors and subcontractors to take specific affirmative actions including:  1) posting in a conspicuous place available to employees and applicants for employment the "Equal Employment Opportunity" (EEO) poster;  2) stating in all solicitations or advertisements for employees that all qualified applicants will receive consideration for employment without regard to race, creed, color, sex, or national origin; 3) sending to each labor union or representative of workers with which there is a collective bargaining agreement a copy of the EEO poster for posting in conspicuous places available to employees and applicants for employment; and 4) placing the "Equal Opportunity Clause" in all subcontracts for any project work which exceeds $10,000.

Minority Business Enterprises (MBEs) and Women Business Enterprises (WBEs)

The State encourages CDBG grantees to work with the State Minority Business Office or Women's Business Office to provide opportunities for participation by minority and women owned businesses in CDBG assisted projects.  Grantees can do this by providing the Minority and Women's Business Offices with notices related to RFPs, bid announcements and the names of contractors awarded contracts.  Grantees can also call the Minority and Women's Business Offices to obtain the names of minority contractors in their areas who can be invited to bid on project work.  The address and phone number are:

• Minority Business Office/Women's Business Office
  Office of Economic Development
  1625 Broadway, Suite 2700
  Denver, CO  80202
  Telephone: (303) 892-3840
  Email:  oedit.info@state.co.us

As used in the contract, the term "minority or woman business enterprise" means a business, at least 51 percent of which is owned by women or minority group members or, in the case of publicly owned businesses, at least 51 percent of the stock of which is owned by minority group members.  For the purposes of this definition, minority group members are reported in the following categories:  Blacks, Hispanics, Asians/Pacific Islanders and American Indians/Alaskan Natives.

Grantees may rely on written representations by bidders, contractors, and subcontractors regarding their status as women or minority business enterprises and need not conduct an independent investigation.  HUD strongly encourages the use of MBEs and Women Business Enterprises (WBEs) for construction and non construction contracts and when procuring other goods (e.g., office supplies) and services (e.g., banking services).

The following are some suggested actions or means through which communities may be able to increase the participation of MBEs and WBEs in their local CDBG programs:

• Identify local MBEs and WBEs from existing directories and lists, including the following:
  • Certified/Pre Qualified Contractor Listing (published by the Colorado Department of  Transportation Business Office:   
    CDOT Civil Rights & Business Resource Center, 4201 East Arkansas Avenue,
    Denver, CO 80222, 303-757-9234 Office, 800-925-3427 Toll Free, 303-757-9058 Fax,  eo@state.co.us.
  • Approved Contractor List Colorado (published by the Small Business Administration, Denver District Office, 721 19th Street, Suite 426, Denver, Colorado 80202; 303-844-2607.
• Identify local MBEs and WBEs through local minority and women groups, business and professional organizations, local government purchasing departments, etc.
• Individually notify MBEs and WBEs of business opportunities resulting from or associated with the CDBG program.
• Disseminate information on business opportunities for MBEs and WBEs through announcements in the local media and through local minority, women, business, professional and trade groups.
• Conduct meetings for MBEs and WBEs to inform them of CDBG and other business opportunities and to explore ways to overcome impediments to their participation.
• Specifically mention MBEs and WBEs in invitations for bids.
• Breakdown contracts into smaller components, where feasible, to make it easier for MBEs, and WBEs and other small contractors to bid on CDBG project work.
• Develop a payment schedule so as to minimize cash flow problems for MBEs, WBEs and other small contractors.
• Work closely with local financial institutions and bonding and insurance companies to alleviate financial barriers for MBEs, WBEs and other small contractors.
• Use the least complicated bid form appropriate for each procurement/solicitation.
• Provide prime contractors with Section 3 compliance guidelines.
• Review bids with unsuccessful bidders, including MBEs and WBEs, so they understand why they were unsuccessful.
• Develop an assistance guide which details the programs and activities available to assist MBEs and WBEs.
• Designate an MBE/WBE Coordinator to facilitate MBE and WBE participation in CDBG and other business opportunities.
• Provide managerial and technical assistance to small businesses, including MBEs and WBEs.
• Provide direct financial assistance (through, for example, CDBG  capitalize revolving funds) to small businesses, including MBEs and WBEs.
• Draft an MBE/WBE plan which identifies actions to be taken to increase MBE and WBE participation and which may establish participation goals.

Affirmative Action - Remedying and Overcoming the Effects of Past Discrimination

The purpose of an affirmative action is to remedy and overcome the effects of past discrimination.  Affirmative actions (presented in an affirmative action plan) must be taken any time there has been a formal finding of discrimination against the localty as a result of a "Compliance Review" conducted by the HUD Regional Office of Fair Housing and Equal Opportunity (HUD/FHEO) as part of its continuing responsibilities or as the result of any discrimination complaint investigation carried out by HUD/FHEO.  For more information, go to the HUD website.  The plan must identify the effects of the past discrimination and specify those actions the locality will take in order to overcome the identified impacts.

Local Grantee Monitoring of Subrecipients and Contractors

When local governments contract with private or public entities for either administration of the CDBG program or for actual project work (e.g. construction of a public facility), the local government must provide the subrecipient or contractor with all applicable equal opportunity and affirmative action information and requirements, and must monitor the contracts to ensure that all required actions are taken.

HUD Reviews and Investigations of Local Grantees

While the state staff is responsible for monitoring civil rights and fair housing compliance by grantees, the Secretary of HUD retains the responsibility for conducting periodic "Compliance Reviews" of State CDBG grantees and remains the designated authority for the investigation and resolution of specific complaints of discrimination or noncompliance.

The HUD Regional Office of Fair Housing and Equal Opportunity (HUD/FHEO) is expected to conduct Compliance Reviews of approximately ten percent of the State's CDBG grantees.  These Compliance Reviews involve detailed analyses of the grantee's civil rights performance and often require extensive preparations on the part of the grantee.  HUD/FHEO makes arrangements directly with the selected grantees for these Reviews.  The State staff is notified and invited to observe.

A complaint may be filed with HUD/FHEO by any person or class of persons within 180 days of the alleged discriminatory action.  (In the case of an alleged Section 3 violation, the complaint must be filed within 90 days.)  After contact with the complainant to clarify the issues, the regional HUD/FHEO investigator will contact the grantee concerning the complaint and schedule a review visit.  Based on interviews and information gathered during the review, the investigator will prepare a report and analysis of the complaint.  If there is no finding of a Title VI violation, regional HUD/FHEO will provide notice to the grantee and the complainant of no finding.  No further action by the grantee is required.

If there is a finding of noncompliance, regional HUD/FHEO will inform the grantee of the finding and may first seek an informal and/or voluntary resolution of the complaint.  This is accomplished through a "Voluntary Compliance Plan" by which the grantee will resolve the impact of the discriminatory action.  The Plan must be approved by regional HUD/FHEO.

If an informal solution cannot be reached, regional HUD/FHEO sends the review report and all supporting documentation related to the case to central office HUD/FHEO (in Washington, D.C.) for the beginning of formal enforcement procedures.  These procedures can result in the termination of federal assistance to the grantee and deferral of any future assistance until the finding is resolved.

Note:  HUD has indicated that every effort will be made to reach informal solutions to noncompliance findings.  Upon receipt of a complaint, regional HUD/FHEO will contact the state to assist in seeking an informal solution to the complaint, if required.

Recordkeeping Requirements

HUD now requires that grantees/subgrantees keep a record of all applicants as well as beneficiaries of any project assisted in whole or in part with CDBG funds for direct benefit activities such as revolving loans to business or housing rehabilitation projects.  HUD asks that these records be kept by race, ethnicity, disability status, and gender of heads of households for both applicants and beneficiaries.  (Providing this information is optional on the part of the applicant/beneficiary)

Other required Civil Rights recordkeeping requirements are listed in Project Start-Up.  A sample application log is contained in Exhibit V-D.