1. Government Employees Housing Scheme (GEHS)
Portfolio Committee: Public Service and Administration
29 November 2017

2. 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

3. PART A: GEHS Scope & Mandate

4. 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

5. Employees housing Aspirations: Comfortable, Secure and functional homes

6. 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

7. 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

8. PART B: GEHS Progress and Achievements

9. 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

10. 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

11. 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)

13. 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

14. Barriers to Housing Finance Access
Potential for Non Mortgage Home Loans
“Beyond the Traditional Housing Market Offering”
Employee Education and Empowerment (Financial Education)

15. Declined Home Loans – Income Bands
(Profile of enrolled employees to the GEHS)
Salary
Salary 1 -6
Salary 7 -10

16. 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.

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. For Service. For Dignity