Waqf Cooperative Housing Model (WCHM) as an Innovative Solution for Affordable Housing

Abstract

The issue of affordable housing around the world is worse as more than half of global population is considered poor. These low incomes earning people have been struggling for shelter for many decades. Despite several government initiatives, they are not able to possess their own homes because of many reasons. Consequently, they are compelled to live in slums. They spent most of their disposable income on rentals and thus unable to provide proper nutrition and education to their children. This gives rise to lawlessness, drug addiction and extremism in the society. It is estimated that two billion homes will be needed over the next eighty years to cater to the need of homeless people and because of increasing fiscal deficits and budgetary constraints, governments are unable to cope with this demand. To fill this gap between demand and supply of housing units, this study introduces an innovative model Waqf Cooperative Housing Model (WCHM) that aims to create a synergy between Waqf and development cooperative housing. Moreover, this paper also attempt to overcome the problem of lack of financing for cooperatives, and proposes three Waqf based sources of finance that are Cash Waqf, Waqf Sukuk and revenue generation from common area (Waqf area) of condominiums for the development of cooperative affordable housing.