Repositioning Waqf for Affordable Housing: An Islamic Social Finance Framework for Inclusive and Sustainable Urban Development

Abstract

Rapid urbanization, rising housing costs, and income inequality have escalated homelessness and housing vulnerability in developing and Muslim-majority nations. Conventional housing finance often excludes low-income households due to affordability constraints, collateral requirements, and institutional barriers. Although waqf has historically provided public-benefit services, its potential as an institutionalized social-finance mechanism for affordable housing remains underdeveloped. This study examines how waqf can be reoriented as a sustainable social-investment instrument for inclusive urban development. Adopting a conceptual qualitative approach, the study analyzes classical Islamic jurisprudence, peer-reviewed literature, policy documents, and international development reports through the lenses of Maq??id al-Shar??ah, institutional theory, social justice, and sustainable urban development. It proposes an Institutional Waqf-Based Affordable Housing Framework (IWAHF) integrating productive waqf assets, effective governance, complementary Islamic finance, multi-stakeholder partnerships, and digital infrastructure. Conceptually, the study repositioning waqf from traditional charitable asset management toward institutionalized social investment, offering a framework to advance affordable, inclusive, and resilient urban housing systems within broader social protection mechanisms.