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Government Employees Housing Scheme (GEHS)
Portfolio Committee: Public Service and Administration 29 November 2017
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PURPOSE The purpose of this presentation is to appraise the Portfolio Committee on: Part A: The scope & mandate of the GEHS Part B: Progress in the implementation of the GEHS
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PART A: GEHS Scope & Mandate
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Prevailing Material Conditions
Most public servants face difficulties in accessing housing finance for a variety of reasons…and so live in inadequate housing circumstances with asset poverty Increases in the housing allowances have not translated into home-ownership There is failure of the residential property market in addressing affordable housing needs of the Gap market due to persistent structural and systematic dys-functionalities: Marked underserviced GAP market Under-supply of affordable housing units Access barriers to affordable finance (limited products & credit criteria) Multiple bottlenecks in the development value-chain (supply side) It is common cause for employers to support employees in accessing affordable homes and ownership by intervening in the supply of housing though defined schemes. Government employees constitute the largest share of the Gap Market The rationale of the GEHS is aimed at addressing multiple barriers faced by employees in accessing housing on a sustainable basis – thereby creating fundamental change in the structure, systems, institutions and patterns of home ownership and control of the housing finance in favour of all South Africans
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Employees housing Aspirations: Comfortable, Secure and functional homes
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Mandate & Establishment of the GEHS
Public Service Co-ordinating Bargaining Council (PSCBC) Resolution 7 of 2015: Agreement to establish a Government Employees Housing Scheme Agreement was signed on 27 May The GEHS came into effect on 01 July 2015 and is implemented incrementally (in phases). A Project Management Office established within the DPSA is responsible to administer, operate and manage the GEHS in the interim A PSCBC Consultative Committee on GEHS is inactive
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GEHS Service Programmes Comprehensive Employee Housing Access Service
Vision: All public sector employees have access to affordable housing opportunities Mission: To offer sustainable housing solutions to all government employees Goal: Increase homeownership among employees Programme 3 Affordable Housing Finance Programme 1 Housing Allowance Programme 2 Empower Employees Programme 4 Rental Housing Programme 5 Housing Supply Management Allowance Administration Education and Advise Inter-mediation: Lenders (mortgage and non mortgage HL) FLISP State Guarantee Payroll deductions Part A: Private Rental Planning support and Delivery Facilitation GEHS Individual Linked Savings Facility Enrolment and Profiling Part B: Rental of State/ official Housing Salary level 1-10 SMS/MMS Services Available to ALL employees
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PART B: GEHS Progress and Achievements
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1. GEHS Interim Operations and Key Milestones
GEHS Project Management Office established in DPSA Implemented the new and increased Housing Allowance (R1276) Implemented the Individual-Linked Savings Facility GEHS Customer Care & Employee Support HR Units in all Departments trained/ orientated on GEHS implementation GEHS Information sessions for employees (per department) Established Enrolment System & Support Call Centre GEHS Website Housing Advisory Service and Financial capability (incremental) Active Housing Finance Access Service: Loans & subsidies Engagements with Banks & Lenders Facilitate housing supply – Developers, spheres of Govt. Etc. Prepared business case (feasibility study) to Establish GEHS Entity
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1. Financial Injection One of the reason for the slow start on capacitating the GEHS has been insufficient funding. It is pleasing that the National Treasury has now made an allocation of R million over the Medium-term Expenditure Framework. This allocation is broken down as follows: Financial Year 2018/19 2019/20 2020/21 Amount R m R m R m
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2. Increased GEHS Housing Allowance
1,1 million Employees (Level 1-10) are eligible to receive the housing allowance subject to meeting specific conditions Before GEHS (1 July 2015) Estimated R3 billion/FY (R900) Home-owners employees Rental Accommodation employees GEHS Housing Allowance (Post 1 July 2015) Estimated R6.5 billion/FY (R1276 previously R1200) GEHS: Home-owners (includes Communal land - PTO) employees (R8.5 billion) Total Estimated State Allocation (Since July 2015) = 11billion GEHS: Tenants (employees in rented housing) employees Over R4 bn accumulated by employees (tenants) in the GEHS Savings facility Average savings per employee = R (incl interest)
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3. Increased access to affordable housing finance to government employees
The GEHS arranges housing finance for employees and facilitates access to finance. DPSA and Public Investment Corporation (PIC) have partnered to provide home finance opportunities for employees on affordable terms The PIC has invested R11bn (funding line) in SA Home Loans to enable delivery of affordable housing finance Employees apply for home loans directly from SA Home Loans: Mortgage home loans - To date over R2,9 bn in home loans has been approved Non-mortgage home loans – since May 2017 – R6.6 mill. worth of loan applications
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Barriers to Housing Finance Access
Potential for Non Mortgage Home Loans “Beyond the Traditional Housing Market Offering” Employee Education and Empowerment (Financial Education)
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Declined Home Loans – Income Bands
(Profile of enrolled employees to the GEHS) Salary Salary 1 -6 Salary 7 -10
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4. Administration Enablement
GEHS Savings Facility established: PSCBC Res 7/2015 Employees save a portion of the housing allowance Administered by GEHS Office, funds managed by Treasury Interest is earned on saved funds Employee enrolment system and support call center Employee Information Sessions: 65 National Departments (± employees) 45 Provincial Departments (± employees) 55x GEHS policy and benefits Training sessions for Human Resources practitioners in all Depts.
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5. Other achievements: Partnerships
Joint workings with Dept. of Human Settlements i)A Joint Operational Steering committee has been established between the DPSA-GEHS and the DHS which aims to ensure alignment and coordination in the convergence of mandates during the implementation of the GEHS objectives. However, the Steercom has been unable to meet since March 2017 due to unavailability of Steercom members from the DHS. b) IGR Protocols/ Agreements with public bodies: Public Investment Corporation RISIMA Housing Finance corporation (Limpopo) ITHALA Limited (KZN) National Department of Human Settlements + entities viz Rural Housing Loan Fund – housing loans in rural areas
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6. Engagements with Property Developers
Objective: To facilitate housing stock supply in suitable locations for employees Housing Profile of Employees: employees - aspiring homeowners Earning between R6 000-R35 000 Affordability: From R Location! Location! Location! Engagements underway with public and private property developers: Available and Affordable housing units priced from R Serviced sites (Self-build) Approximately 1.2million housing opportunities available
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Overview: Phased GEHS implementation
Start Design and Development Phase 0: Research and Benchmarking Housing Scheme Policy & Business Case Development Approval, negotiation and agreement Partnership Structuring Initiation of the GEHS Start – 2015/16 Phase 1: GEHS PMO: Recruit personnel GEHS Kick Start Enrolment of employees Implement new housing allowance Activate Housing Finance Access Establish Savings Facility GEHS Interim Operations and Incubation Start – 2016/17 Phase 2: Upscale capacity of GEHS PMO Activate and Implement GEHS Service Programmes Establish a dedicated GEHS entity GEHS Consolidation and Up-scaling Phase 3: Migrate the GEHS PMO into the established entity Service programs of the GEHS in full operation and impact realised. Manage partners’ participation and performance Monitoring, Evaluation and Impact Assessment
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GEHS Planned Milestones
Employees Outreach programme Mobilise and support employees Enrolment Resolve housing allowance exceptions/ anomalies Open Customer walk-in centers (Pretoria and Provinces) Widen Housing Finance Access service (more lenders) Finalise GEHS Institutional arrangements beyond the Project Office
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GEHS benefits Employees: Government (as the employer):
Access to housing support services of the GEHS & affordable finance Improved socio-economic benefits from home ownership Overcome asset poverty Government (as the employer): a more stable and secure workforce with the social benefits of home ownership and security (enhanced employee benefits) Increased workforce productivity RSA National impact: GDP growth from increased activity in the affordable housing sector Supports economic growth and achievement of National Development Plan priorities Diminish gap in the housing market & broadened property ownership
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Risks Facing the GEHS Banks may elect not to respond favourably to the needs of employees. This will simply perpetuate the current status quo. However, partnership negotiations with all major home loan providers are at an advanced stage. This will diminish this risk Residential property developers may elect not to respond to housing options preferred by employees. Partnerships with both Public and Private entities in the property development space are being negotiated. This will mitigate the risk of shortage of housing stock
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For Service. For Dignity
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