Development of a Proposed Wakaf-Zakat-Real Estate Developer Joint Venture Model to Address the Issue of Affordable Housing For the Low and Middle Income Muslim Families

Among the most critical problems currently facing the Muslims ummah in Malaysia is the lack of decent and affordable housing for the low and middle income families. Consequently, many such families have to endure staying in cramped and often unfavorable living conditions especially those dwellers in big cities. In Islam there exist two key socio-economic tools that are supposed to help the ummah getting out of poverty namely wakaf and zakat. However, wakaf has often been labelled as rich in asset but poor in cash. Wakaf, as depicted by such a label, and coupled with poor management have led to critiques including that wakaf has not been able to realize its potential in terms of poverty alleviation of the ummah. Zakat is seen by many as rich in cash but lacks in sustainable productivity. As such zakat, under the current state of affairs, has also been criticized as not being able to effectively help the ummah to get out of the poverty trap. Thus the issue is three dimensional in nature. The challenge therefore is on how the administration of wakaf and zakat could be innovated so that they could be utilized effectively towards helping the low to middle income Muslim families having access to affordable housing. This paper attempts to address this challenge. Through critically reviewing existing literature and discussions with key experts the paper endeavors to propose a model whereby the administrators' of wakaf and zakat and real estate developer may form a tripartite joint venture to appropriately develop wakaf land, the objective being to address the issue of affordable housing of the low to middle income families. Admittedly, the wakaf-zakat-real estate developer joint venture model is preliminary in nature and therefore experts, especially those from the Shari'ah background are invited to discuss the model further and for its Shari'ah legitimacy to be validated.