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PALGRAVE STUDIES IN
ISLAMIC BANKING,
FINANCE, AND ECONOMICS
Food
This isSecurity,
a
Palgrave Macmillan
Affordable
Series Title
Housing,
and
This isPoverty
a Palgrave
Macmillan Series
An Islamic Subtitle
Finance
Perspective
Ahmet Suayb Gundogdu
Palgrave Studies in Islamic Banking, Finance,
and Economics
Series Editors
Mehmet Asutay, Business School, Durham University, Durham, UK
Zamir Iqbal, Islamic Development Bank, Jeddah, Saudi Arabia
Jahangir Sultan, Bentley University, Boston, MA, USA
The aim of this series is to explore the various disciplines and sub-
disciplines of Islamic banking, finance and economics through the
lens of theoretical, practical, and empirical research. Monographs and
edited collections in this series will focus on key developments in the
Islamic financial industry as well as relevant contributions made to moral
economy, innovations in instruments, regulatory and supervisory issues,
risk management, insurance, and asset management. The scope of these
books will set this series apart from the competition by offering in-depth
critical analyses of conceptual, institutional, operational, and instrumental
aspects of this emerging field. This series is expected to attract focused
theoretical studies, in-depth surveys of current practices, trends, and
standards, and cutting-edge empirical research.
Food Security,
Affordable Housing,
and Poverty
An Islamic Finance Perspective
Istanbul Sabahattin Zaim University
Istanbul, Turkey
ISSN 2662-5121 ISSN 2662-513X (electronic)

Palgrave Studies in Islamic Banking, Finance, and Economics
ISBN 978-3-031-27688-0 ISBN 978-3-031-27689-7 (eBook)
https://doi.org/10.1007/978-3-031-27689-7
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
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There are some who impress you with their views regarding worldly affairs
and openly call upon Allah to witness what is in their hearts, yet they are
your worst adversaries. And when they leave, they strive throughout the
land to spread mischief in it and destroy crops and cattle. Allah does not
like mischief .
- 2:204–205 -
Preface
There is a tendency in conventional economics and finance academia to

be apologetic when dealing with globally prevailing unfair economic and
financial systems. This makes poverty inevitable, no matter the techno-
logical development of a country. The Islamic economics and finance
academia is not immune from this tendency. This book is the product
of an attempt to look differently at the issue of poverty intermingled
with food security and affordable housing. The book aims to raise aware-
ness about the root causes and suggests novel proposals that will lead to
sustainable solutions. It is based on the understanding that if we continue
doing more of the same things, we cannot expect to produce different
results. The book is also premised on the understanding that the financial
sector can promote economic progress only if it channels capital to the
most productive use while avoiding moral hazard and adverse selection.
The issue of collateral taking promotes a situation where financial insti-
tutions prefer to lend only to-big-to-fail structures for shelter and food
sectors that fuel poverty and inequality. The conduct of financial institu-
tions promotes real estate hoarding, which impedes providing affordable
shelter to the young generation. In agriculture, it promotes lending to big
agricultural producers and overlooks smallholder farmers. This adverse
selection ultimately gives rise to food security and affordable housing
issues. This indicates that financial liberalization is not the solution to
dealing with poverty and inequality. Instead, strong policy stands and
financial regulations to direct capital to provide long-term sustainability
are needed.
ix
x PREFACE
Both food and shelter are underpinnings of poverty per the Islamic
definition of poverty. These two subjects have a strong resemblance. The
food and shelter problem has remarkably similar root causes related to
policy discourse and the use of harmful financing.
Regarding the issue of shelter in the development arena, the discussion
revolves around affordability. We still have not solved the shelter problem
despite massive technological development. This is because affordability
prevents us from taking advantage of cost-effective construction novelties.
Today, building shelters would have been much cheaper if the finan-
cial policies did not fuel a rise in land and house prices. For instance,
providing mortgages with long tenors to finished houses increases the
number of bidders, and the general public pays more than the shelter
should cost. The same mechanism increases land prices. One solution for
this challenge is to impose land use policies, such as a time limit for owner-
ship and Zakat on land purchased for hoarding and speculation. Such
policies would impede the hoarding of urban and rural land. Another
approach to tackling food security and shelter would be using finance
on the production side. Financing trading of finished houses and agri-
cultural commodities fuels prices, leading to increased bidding. Hence,
the remedy for the challenge of unaffordable housing and lack of food
security is the same: Zakat-based management of land use policy.
Can we solve the problem of unaffordable housing and lack of food
security if we stop tunneling financial resources to purchases? Unfor-
tunately, the case is a bit more convoluted. Bringing future demand
forward, with debt-creating Islamic finance contracts such as Murabaha,
to boost the economy is an accepted concept as long as such demand does
not give rise to unfair price formation/hike. Financing should be chan-
neled for both production and consumption without distorting prices.
Proper Islamic lending contracts should be harnessed with matching
resource mobilization/securitization contracts to avoid systematic risk
for the financial sector and assure fair price formation for the public.
A mismatch between lending and resource mobilization/securitization
markets is the general characteristic of financial crises.
Islamic perspective on food and shelter revolves around fair price
formation to assure affordability and healthy supply and demand of food
and shelter. On the one hand, we need to ensure supply by production.
On the other hand, we should ensure that there is matching demand
created with debt contracts while assuring unfair exploitive price forma-
tion. These two areas are essential to tackle poverty alleviation, which is
PREFACE xi
still at the top of the development agenda, regardless of many decades

of development efforts. Unlike things that may look like for non-experts,
the housing case is easier to resolve by policy discourse to limit the time
of land ownership and impose Zakat on land hoarders. As it is, the land
is purchased for infinity in many jurisdictions, and such a time dimension
yields skyrocketing asset price calculations unrelated to the cost of produc-
tion. By limiting the period of land ownership, we can assure affordability.
Hence, the first chapter will present the details and Islamic opposition to
rent control as an alternative. The chapter also discusses the systematic
risk created to the financial and economic system by the real estate sector.
The second chapter presents a supply-side intervention with mortgages
and securitization with Islamic finance tools.
In the subsequent chapters, the issue of food security is discussed from
an Islamic perspective. The third chapter identifies the root cause of food
insecurity as unfair price formation in the agricultural input and output
markets, mainly due to financial derivatives. Today, the majority of food
in the world is produced in a relatively small area with massive irriga-
tion. These economies of scale do not allow smallholder farmers to have
a more resilient and competitive supply market. Any climate issue in these
mass production areas would lead to supply shortages, even if a handful of
agricultural commodity producers do not take advantage of their domi-
nant position to impose higher prices. Even without natural hazard risk to
such mass scale agricultural commodity production business model, it is
not wise to leave the world population at the mercy of a few agricultural
commodity producers. Hence, the fourth chapter is dedicated to creating
an enabling environment with Islamic finance intervention to address the
issue of trading agricultural commodities for smallholder farmers. Finan-
cial derivatives mainly contribute to price fluctuation in agricultural input
and output markets. Hence, they are the main contributor to food inse-
curity. In this chapter, Islamic alternatives such as asset-backed Murabaha
with a margin call and Islamic future contract are introduced to guarantee
market price stability and supply predictable prices for food processors.
Addressing the demand side market structure alone would not suffice to
stabilize agricultural commodity prices. Hence, the fifth chapter is dedi-
cated to a case of financing cotton production, a cash crop, by smallholder
farmers under an agricultural cooperative.
For housing and food security, with proper Islamic finance interven-
tion, we can stabilize prices, and assure steady production of assets, and
healthy demand without increasing prices, hence eradicating poverty. This
xii PREFACE
aspect of supply and demand is similar for both shelter and food. Another
similarity for both food and shelter problem is enabling economic and
social infrastructure for rural and urban settings. Chapter 6 elaborates on
the Islamic perspective of the provision of enabling infrastructures. Again,
the focus on infrastructure development is availability while ignoring
affordability and long-term sustainability. The chapter identifies the best
business model for providing economic and social infrastructure for rural
and urban areas to assure affordability and sustainability. Chapter 7 elab-
orates on the role of government and has concluding remarks on the
importance of Taqwa (Islamic DOs and DON’Ts) to achieve Pareto
optimal solutions and the use of finance subjects for the more signif-
icant benefit of society rather than individual enrichment. Accordingly,
Taqwa’s approach to affordable housing and food security in pursuit of
poverty alleviation is provided.
Istanbul, Turkey Ahmet Suayb Gundogdu

Contents
1 Affordable Housing and Poverty 1

The Role of Price Formation and Land Use Policy 6
The Role of Zakat 10
Zakat from Company Shareholding 16
The Role of Waqf 19
State Housing Development Projects 24
References 25
2 Islamic Mortgages and Securitization 27
The Issue of Resource Mobilization and Securitization 28
Bai Al-Inah 33
Bai Al-Dayn (Islamic Discounting/Factoring) 33
Organized Tawarruq: Commodity Murabaha 34
Islamic Mortgages and Lending 36
Murabaha as Practiced by Islamic Banks for House
Financing 38
Ijara as Practiced by Islamic Banks House Financing 40
Islamic Resource Mobilization 42
Ethis Crowdfunding, Indonesia 43
Islamic Rent-Supporter Lottery System, Turkey 47
The Next Level Housing Program 48
The Role of Community Waqf in Real Estate Development 53
References 54
xiii
xiv CONTENTS
3 Food Security and Poverty 57

SDGs and Food Security 61
Fi’sabilillah Spending 65
Zakat for Poverty Alleviation and Food Security 67
Economic Empowerment Programs 70
The Issue of Agricultural Prices 74
Post-Harvest Losses and the Role of Warehousing 79
International Trade of Agricultural Commodities 80
References 82
4 Financing the Trade of Agricultural Commodities 87
Islamic Trade Finance Contracts and Risk for Financiers 88
Risk in Asset-Based Islamic Trade Finance Contracts 88
Risk in Asset-Backed Islamic Trade Finance Contracts 93
Margin Call 107
Murabaha Sale: Asset-Based or Asset-Backed 107
Commodity Price Risk Management 111
Islamic Future Contract and Liquidity Management 119
Shari’ah Non-compliant Products on the Stage 120
Shari’ah Compliant Alternatives from the Grassroots 120
References 123
5 Financing the Production of Agricultural Commodities 125
Cotton Cooperative and Financing 127
What is Structured Trade Finance 130
Financing Based on Warehouse Receipt 131
Financing Based on Export Receivable 131
Financing Facility Structure 132
Financier’s Security Structure 133
Schedule of Implementation and Security Package 134
Collateral Management 138
Assessment of the Structure 140
Annex-I Export Cash Flow 143
Annex-II Salam Price Calculation 143
References 145
6 Enabling Infrastructure 147
Definition and Categorization of Infrastructure 151
Sustainability Parameters 155
Business Model for Service Delivery 157
CONTENTS xv
Contracts for Asset Development 160

Resource Mobilization to Scale-up 165
References 170
7 The Role of the State 173
Hisbah 174
Infrastructure: Output, Outcome, and Services 175
Determinants of Success 177
References 180
Index 181
List of Figures
Fig. 2.1 Resource mobilization/securitization and lending (Source

Author) 30
Fig. 2.2 Organized Tawarruq with commodity Murabaha. (Source
Gundogdu [2014]) 35
Fig. 2.3 Phase 1, Istisna contract for construction (Source Ethis
crowdfunding) 45
Fig. 2.4 Phase 2, Murabaha contract for the sale of finished
houses (Source Ethis Crowdfund 46
Fig. 2.5 Rent-supporter lottery system (Source EminEvim) 48
Fig. 3.1 Commodity food price index (Source Index Mundi) 74
Fig. 3.2 Cotton monthly price—US dollars per kilogram (Source
Index Mundi) 76
Fig. 4.1 Islamic trade finance contracts categorized (Source
Gundogdu [2016a]) 89
Fig. 4.2 Risk in asset-based Murabaha (Source Gundogdu [2016a]) 90
Fig. 4.3 Transaction flow for asset-based Islamic export financing
(Source Gundogdu [2016b]) 92
Fig. 4.4 Transaction scheme of asset-backed Murabaha (Source
Gundogdu [2016a]) 94
Fig. 4.5 Risk in asset-backed Murabaha (Source Gundogdu
[2016a]) 96
Fig. 4.6 Schematic flow of the transaction (Source Gundogdu
[2014]) 109
Fig. 4.7 Sugar price volatility (Source Gundogdu [2014]) 112
xvii
xviii LIST OF FIGURES
Fig. 4.8 Histogram for one-month sugar price change (Source

Gundogdu [2014]) 114
Fig. 4.9 Rank and percentile for six-month sugar price changes
(Source Gundogdu [2014]) 115
Fig. 4.10 Liquidity management based on asset-backed Murabaha
through physical commodities in licensed warehouses
(Source The author) 121
Fig. 6.1 Unlocking energy access finance through crowdfunding
(Source Diallo and Gundogdu [2021]) 166
List of Tables
Table 1.1 Outcome and output table as-is case; conventional

approach 5
Table 1.2 Outcome and output table to-be case; Islamic approach 6
Table 1.3 Discouraging hoarding of land 14
Table 1.4 Company valuation methods 18
Table 2.1 Matching lending and resource mobilization 49
Table 3.1 The Millennium Development Goals (MDGs) 61
Table 3.2 Sustainable Development Goals (SDGs) 62
Table 3.3 Causes and solutions 64
Table 3.4 Classic microfinance vs. Islamic microfinance based
on the economic empowerment concept 73
Table 4.1 Risk management in Islamic asset-based import financing 91
Table 4.2 Risk management in Islamic asset-based export financing 93
Table 4.3 Eligibility criteria for the obligor 97
Table 4.4 Eligibility criteria/responsibility for the collateral manager 98
Table 4.5 Assignment of receivable 100
Table 4.6 Descriptive Statistics for one-month sugar price change 112
Table 4.7 Descriptive statistics, security coverage, and cash deposit
needed for 3–6–9 month’s tenor financing 114
Table 4.8 Margin Call Illustration for six-month tenor financing 116
Table 5.1 Schedule of cotton financing cycle 135
Table 6.1 Infrastructure categorization 152
Table 6.2 Infrastructure subsectors 154
Table 6.3 Sustainability parameters 157
Table 7.1 Infrastructure sectors 176
xix
xx LIST OF TABLES
Table 7.2 The role of government in Islam 177

Table 7.3 Lending and resource mobilization contract 178
Table 7.4 Discouraging hoarding of land 179
CHAPTER 1
Affordable Housing and Poverty

“The root causes of the problem in accessing
affordable housing”
In Islam, paying Zakat, avoiding Riba, and spending to avoid hoarding

have much more value than abstaining from fornication, theft, and
drinking. The hoarding issue has not been appropriately preached since
Al-Ahbari has been hoarding.1 The importance, as well as the proper
imposition of Zakat, is also ignored. Case Box 1.1 showcases the clari-
fication from Muhammad ( ).
Case Box 1.1: The merit of Paying Zakat

I went out one night (and found) the Messenger of Allah ( ) walking all
alone. There was no man with him. I thought that he did not like anyone
walking along with him. So I began to walk in the light of the moon.
He, however, turned his attention to me, saw me, and said: Who is this? I
said: It is Abu Dharr. Let Allah make me a ransom for you. He said: Abu
Dharr, come on. He (Abu Dharr) said: So I walked along with him for
some time, and he said: The wealthy persons would have little (reward)
on the Day of Resurrection, except upon whom Allah conferred goodness
(wealth). He dispensed it to his right, left, in front of him, and at his back
(just as the wind diffuses fragrance) and did good with it (riches). I went
1 Referring to Shurah At Touba, Ayah 34 for .
© The Author(s), under exclusive license to Springer Nature 1

Switzerland AG 2023
A. S. Gundogdu, Food Security, Affordable Housing, and Poverty,
Palgrave Studies in Islamic Banking, Finance, and Economics,
https://doi.org/10.1007/978-3-031-27689-7_1
2 A. S. GUNDOGDU
along with him for some time when He said: Sit here. And he made me
sit at a safe place, and there were stones around it, and he said to me: Sit
here till I come to you. He went away on the stony ground till I could
not see him. He stayed away from me, and he prolonged his stay. Then
I heard him as he came back, and he was saying: Even if he committed
theft and even if he committed fornication. When he came, I could not
help asking him: Apostle of Allah, let Allah make me ransom for you; who
were you speaking on the stony ground? I heard nobody is responding to
you. He (the Holy Prophet) said: It was Gabriel who met me by the side
of the stony ground and said: Give glad tidings to your Ummah that he
who died without associating ought to with Allah would go into Paradise.
I said: Gabriel, even if he committed theft and fornication? He said: Yes.
I said: Even if he committed theft and fornication? He said: Yes; I again
said: Even if he committed theft and fornication? He said: Yes, even if he
drank wine
Source Sahih Muslim, 2175
The religion of Islam advises a delicate balance by encouraging prop-

erty ownership until a certain hoarding level, spending money on the first
family, and then giving alms to the community. Discouraging hoarding,
encouraging spending, and almsgiving are perceived as solutions to
grapple with poverty. In Islam, poverty is one of the most important
issues, which needs to be handled to the extent that it is similar to strug-
gles against disbelief (kufr). Muhammad ( ) said: “O Allah! I seek refuge
from disbelief (kufr) and poverty.”2
The definition of poverty in Islam is based on Zakat liability. A person
is deemed poor if their net worth is negative. Unlike the conventional
understanding of income, in Islam, a person should have shelter, a trans-
port vehicle, and a certain amount of savings to ensure the affordability
of needs for a year to be considered not poor. A person with a negative
net worth is still deemed poor in Islam, even if they can generate a steady
income. Today, such a steady income can be generated with debt bubbles.
Hence, the Islamic view rejects any reference to the International Poverty
Line based on income less than a certain amount a day that international
organizations use as a reference.
2 Sunan an-Nasa’i 5485.

1 AFFORDABLE HOUSING AND POVERTY 3
The sound understanding of Zakat is linked to a comprehensive

understating of the term hoarding. The Arabic term Ihtikar is used for
collecting, doing wrong, and greediness. The word is mainly used when
referring to people who buy more food than they need to sell at higher
prices during times of shortage (Madni, 2013). There is a clear hadith:
“He who hoards is a sinner.”3
Even though it has generally been associated with food, hoarding
applies to other basic human needs, including real estate. Hoarding works
against fair price formation, which is the pivot of Islamic economics and
finance. This is why state intervention is necessary (Gundogdu, 2019a,
2019b). The definition of hoarding reveals a delicate balance between
Islamic encouragements of property ownership versus price distortion in
the market. For example, a person who uses the property for utility and
commercial purposes is not a hoarder. A person should pay Zakat on
hoarded assets, including money. Avoiding Zakat payment is not a joke
in Islamic belief, as indicated in Case Box 1.2.
Case Box 1.2: Hoarding of Money

Ahnaf B. Qais reported: While I was in the company of the (elites) of
Quraish, Abu Dharr came there, and he was saying: Give glad tidings to
the hoarders of riches that their backs would be branded (so deeply) that
(the hot Iron) would come out of their sides, and when the backs of their
necks would be branded, it would come out of their foreheads. He (Abu
Dharr) then went away and sat down. I asked who he was. They said: He
is Abu Dharr. I went to him and said: What is this that I heard from you
which you were saying before? He said: I said nothing but only that which
I heard from their Prophet ( ). I again said: What do you say about this
gift? He said: Take it, for today it is a benefit. But when it becomes a price
for your religion, then abandon it
The problem of poverty, as conventionally defined, can supposedly be

resolved with loans by stimulating economic growth. However, this solu-
tion often back fires in the long term. The conventional method of Riba
loans without checks and balances only fuels poverty. Should poverty be
defined in the Islamic way based on debt accumulation for higher real
3 Sahih Muslim, 1605.

4 A. S. GUNDOGDU
estate prices leading to negative net worth? The conventional economics

argument about linking economic growth with income is irrelevant as
poverty is defined based on net worth in Islam. The Islamic definition of
poverty suggests that developed countries are not far ahead of the least
developed countries regarding poverty statistics.
Given the definition, the Islamic understanding of poverty prioritizes
affordable housing because providing housing is an important element of
the poverty definition. Accomplishing this universal provision of afford-
able housing with reasonable prices will help avoid negative net worth,
which creates poor people as defined in Islam. Islam accepts the concept
of debt, but such debt should not lead to unfair price formation of real
estate prices. A mortgage is a legal instrument by which the creditor
receives the pledge of the debtor’s residence as collateral. In practice,
however, it was challenging to evict people from their homes due to the
bias of courts and policymakers against lenders due to social repercussions.
The financial sector pushed for strong foreclosure laws imposed on devel-
oping the secondary market to channel more funds to housing finance
(Van Order, 2003). The debt-driven housing market yielded overdevel-
oped beautiful urban and suburban dwellings, yet unhappy people as the
established system worked for capital owners against households.
Islamic mortgages cannot be different from conventional ones as the
more conventional finance engages tangible assets, the more the nature
of business resembles Islamic Finance. Yet, there should be a significant
difference between Islamic finance contracts: late payment charges. In real
life, however, Islamic banks often impose late payment charges similarly to
conventional banks. Shari’ah scholars argue that late payment charges are
permissible to avoid a moral hazard by borrowers, given that banks cannot
accrue any benefit from late payment. This is a challenge to develop a
secondary market for Islamic mortgages.
The issue of resource mobilization is an important topic given that
the 2008 financial crisis emerged out of innovative resource mobiliza-
tion/securitization products. Resorting conventional or Islamic deposit
banks has a significant disadvantage related to the maturity mismatch,
between deposits and loans, precipitating systematic financial sector risk.
Once unaffordable, prices would sky-dive due to the liquidity crisis that
emerged in the financial sector out of the mismatch. In this regard, alter-
natives might be looked for within the capital markets. The Sukuk for
securitizing the mortgage loan is a potential method, yet there are serious
Shari’ah compliance issues with the Sukuk, as-is many are based on: Bai
Table 1.1 Outcome and output table as-is case; conventional approach
Policy tool Output Outcome
Channel more funds with the lower Produce more houses Unaffordable housing
interest rates for construction and
purchase of houses
Source The author
Al-Dayn, Organized Tawarruq, and Bai Al-Inah. Such practices are not
different from conventional instruments. It is unjustified to claim that
Islamic banks as they are can help in facilitating the provision of afford-
able housing. The issue is more related to the policy aspect: availing more
financing, being Islamic or conventional, to home purchases inflates house
prices. The more funds are available and the lesser the interest rate, the
more people bid for the finished houses. As it is practiced today, availing
of more loans is not a solution. It is a root cause of unaffordability. The
fundamentals of the mortgage and securitization topic will be discussed
more in depth in the next chapter.
Table 1.1 indicates the outcome and output design of the present
financial and economic system. It is assumed that affordable housing
will be facilitated by producing more houses and availing more mort-
gages, assuming a trickle-down effect. However, channeling funds to the
production and sale of houses gives rise to high land prices. Funneling
more funds would increase land and house prices and undermine afford-
ability. Besides, the financial sector will get exposed to assets that are not
easy to liquidate in case of liquidity crunches. These recurring bubbles and
crunches will continue due to the fundamentals of the present monetary
system. Table 1.2 presents the Islamic approach.
The policy outcome should be to provide affordable shelter for all,
so more houses should be built. To achieve the desired outcome with
the targeted output, more houses should be produced while decreasing
land and house prices. This chapter discusses the policy tool: “Decrease
Land and House Prices.” The next chapter elaborates on producing more
houses by “channeling more funds with a lower markup to construction
and purchase houses with Islamic finance.”
6 A. S. GUNDOGDU
Table 1.2 Outcome and output table to-be case; Islamic approach
Policy tool Output Outcome
– Channel more funds with a lower Produce more houses Affordable Housing
markup to construction and purchasing
houses with Islamic finance
– Decrease land and house prices by
limiting land ownership time and Zakat
on land/house hoarding
Source The author
The Role of Price Formation and Land Use Policy

Traditionally, it is argued that land prices are a combination of practical
and social matters. There are supposedly four important determinants
impacting land prices: population density, the desirability of land, suit-
ability for development, and planning restriction (Egan, 1996). The
saleability factors, as defined by Egan, are listed below (1996):
. Location: a convenient house with access to public transportation,

schools, hospitals, shops, and recreational centers.
. Condition: a house with substantial expenses is less likely to be sold.
. Type of Property: in some countries, certain types of houses are
more desired.
. Specific Facilities: large kitchen, garage, garden, heating features.
. The appearance of the property.
. Local Planning Permission: local development plan impacts the
saleability of houses. For instance, a factory project nearby may have
adverse effects, while access to supermarkets or transport networks
may have positive effects.
The motivation of private entrepreneurship, which is acceptable and

advised from an Islamic point of view, in housing is to increase the
saleability and profit margins. On the other hand, to the finance expert,
the major impediment to affordable housing is high land prices that get
higher in the low interest rate environment (Gundogdu, 2019a, 2019b).
Encouraging private entrepreneurship does not mean acceptance of unfair
price formation by Islam. It is the other way around; the Islamic proposi-
tion is to produce assets efficiently, ensure the sustainability of assets, and
affordable prices. Affordable price is only attainable with fair land prices.
Skyrocketing land prices are guaranteed due to the Net Present Value
calculation as long as there is no time limit for land ownership. It was
the book entitled “Theory of Investment Value” by William (1938) that
inspired asset valuation based on interest rates in the “Dividend Discount
Model.” William’s (1938) formula for Net Present Value calculation:
∑T Ct
N PV = (1.1)
t=0 (1 + r )t
C = Cash flow at the time (t ).

r = Discount rate expressed as a decimal.
t = Time.
would turn into

C
N PV = (1.2)
r
in the case of perpetuity (Gordon & Shapiro, 1956). The land component
of the house would turn into a monopoly price setting.
For instance, if a house brings about $10,000 in rent a year, under
a 4% p.a. interest environment, the house price would be $250,000. If
the interest rate goes down to 2%, the house price would be predicted
as $500,000 and $1,000,000 in the case of a 1% interest rate. Indeed,
the case would even turn worse in case of inflation higher than the
interest rate: a negative real interest rate environment without assuming
the growth factor of rents. If we restrict land ownership to 99 years in
a 1% interest rate environment, the Net Present Value would be around
$626K. The predicted house price would be $429K and $244K in the
case of 2% and 4% interest rates. In the case of zero interest rate, the
Present Value calculation would go to infinity should we not limit the
ownership duration. In the case of a 99-year ownership duration, the
Present Value prediction of the house price is capped at $990K under
zero interest rate.
Not surprisingly, the effect of interest rates on real estate prices is
a well-established fact (Chiquier & Lea, 2009). The factor implies real
estate appraisal as well. Under a declining interest rate environment, the
appraiser would keep marking ever-increasing real estate valuations. The
8 A. S. GUNDOGDU
main reason behind this is the use of market value, defined based on the
amount for which real estate can be exchanged on the appraisal date.
That is a bigger ticket size of mortgage loans, more indebted house-
holds, and less affordability. The established codes for the independence
of appraisers from both lender and borrower are not the remedy. The
improved version of Mortgage Lending Value is a concept based on value-
at-risk and recognized by the Basel I accord (Merril, 2009). Nevertheless,
Mortgage Lending Value cannot smoothen the effect of interest rates on
real estate prices. The sharp increase in interest rates can easily wipe out
house prices and give rise to a financial crisis.
Indeed, there are three ways that are not suitable under the pretext of
a conventional free economy in terms of addressing the high price issue:
i. Suppressing Periodic Payment (Pmt): limiting rent on housing.

ii. Limiting the time of land ownership to change the formula,
which would predict the trend in asset prices based on the return
generated.
iii. Imposing Zakat on hoarded houses based on the market value,
noting that house prices are not separable from land prices. Hence,
the subject of Zakat should be real estate hoarded.
Today, economic and financial policies, let alone decrease fuel house
prices, substantially contribute to poverty as defined by the Islamic under-
standing. Central banks keep interest rates low to keep financial markets
afloat, and land monopoly is defended in the name of freedom. Indeed,
both supporting financial markets with low interest rates and unlim-
ited land ownership bring about rent-seeking, which is marketed as
freedom. The so-called alternative communism was also noted, but it
can be described as an animal farm with tight control and oppression
of the masses (Orwell, 1945). It is not hard to deduce that the so-
called freedom, capitalism, and communism are massive exploitation of
the masses by a few elites.
The Islamic proposition is much different, and wisdom is derived from
the Quran:
There are some who impress you with their views regarding worldly affairs
and openly call upon Allah to witness what is in their hearts, yet they are
your worst adversaries. And when they leave, they strive throughout the
land to spread mischief in it and destroy crops and cattle. Allah does not
like mischief.
—2:204–205
Many verses in the Quran acknowledge the right of ownership of

rural and urban property and the inheritance of these assets. On the
other hand, fair price formation is at the heart of Islam, as monopo-
listic/oligopolistic price setting and price ceilings (Narh) is forbidden
(Gundogdu, 2019a, 2019b). Putting ceilings on rent violates Narh prin-
ciple while allowing land ownership without a time limit violates the
Islamic principles related to monopolistic/oligopolistic price setting. Both
unlimited time ownership of land and rent ceilings are not welcomed in
Islamic economics.
The main focus of Islamic economics is fair price formulation.
The price distortion due to government intervention or monopo-
listic/oligopolistic markets is unacceptable. As a result, limiting the rent
prices or rent increase rates by the government is not acceptable in Islam.
On the other hand, it is a must to impede unfair price formation due to
monopolistic/oligopolistic markets. As a result, Islamic principles neces-
sitate time limits on land ownership to avoid land hoarding by a tiny
minority that can and will have the absolute liberty of imposing prices.
An Islamic solution can be, not to impose rent ceilings, but to limit land
ownership to 99 Hijri years.
This policy would:
. Discourage rent-seeking in society, making society more dynamic.

This policy would urge parents to better arm their kids with relevant
education rather than accumulating land for sustenance.
. Directing landowners to resort to trade and production rather than
rent-seeking for themselves and their children.
Ownership and inheritance rights are well acknowledged in the Quran as

ways to make the land productive. Limiting land ownership time to 99
Hijri years would make the land more productive while fulfilling fair price
realization in the market by impeding monopolistic/oligopolistic price
setting. Since there would be no hoarding of idle land, people would
have access to land for production.
So far, our discussion has been related to urban real estate. Rural land
is slightly different due to the peculiarities of pastoral agricultural use.
10 A. S. GUNDOGDU
In the case of rural land, land ownership should be also limited. Still,
it should be assured that the land is transferred to people in the same
region to ensure local farming knowledge is transferred from generation
to generation. Priority should be given to the progeny of farmer-owners.
The importance of local farming knowledge is key to food security, as
discussed in Chapter 3. The only sustainable way for food security is to
rely on smallholder farmers to cultivate all global land as opposed to the
as-is approach of relying on a small part of the global land for much of
global food production.
The Role of Zakat

A policy direction that channels funds with low markup would create
housing price bubbles that would later burst and harm many, including
the financial sector. The remedy to such a challenge is to ensure that
while providing low markups, still ensure that there would be no unjus-
tified high prices due to loose monetary and financial conditions. For
example, real estate with $10K rent per annum would be priced around
$990 K under land ownership restricted to 99 Hijri years under a zero
interest rate environment. Imposing a time limit alone will assure owner-
ship and inheritance rights. However, $990K for real estate generating
$10K is still on the high end and would not lessen the hoarding moti-
vation, let alone support the affordable housing agenda. The system
should discourage land hoarding while encouraging land ownership to
generate utility: shelter and food but not rent-seeking. Real estate owner-
ship should be attractive only if individuals create value, not when they
are only interested in rent-seeking.
Generally, Zakat is thought to be an instrument to grapple with
poverty, inequality, and hunger. However, the main influence of Zakat
comes from its role in inhibiting asset hoarding, which leads to monopo-
listic/oligopolistic price formation. From rulers’ perspective, low interest
rates, or markup in the case of Islamic finance, are much desired to stim-
ulate the economy. This preference would benefit the present generation
at the expense of the next generation (Gundogdu, 2019a, 2019b). The
governments should not manipulate the markup on financial activities but
be determined in a free market without price collusion of financial insti-
tutions or those who have excess funds. Even if the markup rates go to
zero, which is not desirable as it would discourage savings, Zakat can
fix the issue of asset price bubbles. Zakat is imposed on hoarded real
estate, noting that the family shelter is exempted from Zakat calculation
at 2.5% based on the asset’s market value. This alone would deter land
hoarding. Even if we take Zakat to be a 2.5% markup, which is not the
case, real estate price will go from $990K to about $365K in a zero
interest rate environment. The price would go from $990K to about
$27K, $219K, and $180K under a 1, 2, and 3% interest rate environ-
ment should the Zakat impose like markup deduction. In reality, however,
Zakat should be levied at 2.5% of the asset’s market value. In such a case,
the house and land prices would go down even further. The imposition
of proper Zakat alone would deter real estate investment for speculation
and hoarding purposes, and land prices would stabilize in affordability.
This policy would encourage people to live in better properties for shelter
purposes while deterring hoarding.
Like urban land, agricultural land should not be an object of spec-
ulation in low interest rate environments. The 99 Hijra year ownership
restriction can be applied as well. On the other hand, agriculture has
different parameters for Zakat, as a hadith is presented in Case Box 1.3.
Case Box 1.3: Hadith on Zakat for Agriculture

Jabir b. Abdullah reported the Apostle of Allah (may peace be upon him)
as saying: No owner of camels or cattle or a flock of sheep or goats who
does not pay his due (would be spared punishment) but would be made to
sit on the Day of Resurrection on soft sandy ground. The hoofed animals
would trample him with their hoofs and gore him with their horns. And
none of them on that day would be without horns or with broken horns.
We said: Messenger of Allah, but what is due on them? He said: Lending
of the male (for use) and lending of the bucket (used for drawing water for
them) and for mating and milking them near water and providing them
as a ride for the sake of Allah. And no property owner who does not pay
Zakat (would be spared punishment), but it (his property) would turn into
a bald snake and follow its owner wherever he goes. He would run away
from it, and it would be said to him: That is your property about which
you were stingy. And when he would find no other way out, he would
thrust his hand in its mouth, and it would gnaw it like a male camel
The hadith gives a valuable clue about the case of Zakat for the agricul-
tural sector. Whether we refer to farms or animals, Zakat is collected from
the products. “A tenth is payable on what is watered by rivers, or rains,
12 A. S. GUNDOGDU
and a twentieth on what is watered by camels (Sahih Muslim, 981).”

Due to cost, the Zakat on irrigated agricultural entrepreneurship is less
than unirrigated. Yet, there is no Zakat obligation if the yield is below a
certain level: “There is no Zakat payable (on grain or dates) on less than
five camel loads. The Wasq (one camel-load) measures sixty sa’ in weight
(Abu Dawood, 1559).”
In the case of hoarded money, 2.5% of it is due for Zakat payment:
Pay a fortieth. A dirham is payable every forty, but you are not liable for
payment until you have accumulated two hundred dirhams. Five dirhams
are payable when you have two hundred dirhams, and that proportion
applies to larger amounts. (Abu Dawood, 1572)4
The critical point for Zakat’s discussion is defining the hoarding level. The
hadith provided in Case Box 1.4 gives a hint about hoarding thresholds.
Case Box 1.4: Defining Hoarding Thresholds

I think the Prophet ( ) said: “Pay a fortieth. A dirham is payable every
forty, but you are not liable for payment until you have accumulated two
hundred dirhams. Five dirhams are payable when you have two hundred
dirhams, and that proportion applies to larger amounts
“Regarding sheep, for every forty sheep up to one hundred and twenty,
one sheep is due. But if you possess only thirty-nine, nothing is payable
on them.” He further narrated the tradition of the sadaqah (Zakat) on
sheep like that of az-Zuhri
“Regarding cattle, a yearling bull calf is payable for every thirty, a cow
in her third year for forty, and nothing is payable on working animals
Regarding (the Zakat on) camels, he mentioned the rates that az-Zuhri
mentioned in his tradition. He said: “For twenty-five camels, five sheep
are to be paid. A she-camel in her second year will be given if they exceed
4 Abu Dawood, 1561: A man said to Imran ibn Husayn: AbuNujayd, you narrate to
us traditions whose basis we do not find in the Qur’an.
Thereupon, Imran got angry and said to the man: Do you find in the Qur’an that
one dirham is due on forty dirhams (as Zakat), and one goat is due on such-and-such
number of goats, and one camel will be due on such-and-such number of camels?
He replied: No.
He said: From whom did you take it? You took it from us, from the Messenger of
Allah ( ).
He mentioned many similar things.
by one. If there is no she-camel in her second year, a male camel will be

given up to thirty-five in its third year. If they exceed by one, a she-camel
in her third year will be given up to forty-five. If they exceed by one, a
she-camel in her fourth year, ready to be covered by a bull-camel, is to be
given.” He then transmitted the rest of the tradition like that of az-Zuhri
He continued: If they exceed by one, i.e., ninety-one to hundred and
twenty, two she-camels in their fourth year, which are ready to be covered
by a bull-camel, are to be given. A she-camel will be given for every fifty in
her fourth year if there are more camels. Those in one flock should not be
separated, and those who are separated should not be brought together.
An old sheep, one with a defect in the eye, or a billy goat is not to be
accepted as a sadaqah unless the collector is willing
As regards agricultural produce, a tenth is payable on that which is
watered by rivers or rain, and a twentieth on that which draught camels
water.”
The version of Asim and al-Harith says: “Sadaqah (zakat) is payable
every year.” Zuhayr said: I think he said, “Once a year.”
The version of Asim has the words: “If a she-camel in its second year is
not available among the camels, nor is there a bull-camel in its third year,
ten dirhams or two goats are to be given.”
Source Abu Dawood, 1572
In essence, until the hoarding threshold, Zakat can be calculated based

on a percentage of income generated from the asset. However, Zakat
should be collected based on market value after the threshold. Then, 2,5
percent of money or sheep is due. In the modern world, each country
should define hoarding thresholds. For instance, if the threshold for the
residential house is 200 m2 , a person can have 100 m2 for his inhabitance
and rent out the remaining 100 m2 . In this case, Zakat on the rent can
be calculated akin to irrigated land, that is, 5 percent of the income. The
same logic may apply to commercial real estate and agricultural land. After
200 m2 , Zakat should be collected from hoarded assets based on 2.5% of
the market value.
Islam’s land use policy is different for agriculture to ensure sustainable
agricultural production. However, this does not mean hoarding agricul-
tural land without a production motive is permissible. In this case, the key
is in the word “hoarding”: any land not used for production should be
subject to Zakat based on 2.5% of the market value. The land should
be available for those who want to produce rather than those intent
14 A. S. GUNDOGDU
on rent-seeking. This should not be done by targeting people’s owner-

ship rights but by levying Zakat to impede rent-seeking and encourage
genuine effort. That is, real estate ownership should be attractive until a
certain level. Once it gets to the hoarding level, it must be made unattrac-
tive to fulfill the guidance of “Ayah 2:204–205.” It is very clear that Islam
proposes subtle wisdom, unlike the totalistic approaches of communism
and capitalism. Although it might sound appealing, both are extreme, and
“they strive throughout the land to spread mischief in it and destroy crops
and cattle” (Table 1.3).
The logic of Zakat also would have a reflection on industrial land. Can
we collect Zakat based on the market value of a factory? Not really, as
factory land, akin to agricultural land, is a factor of production. Similarly,
the house used for family shelter is also not subject to Zakat. On the
other hand, the provision of collecting Zakat based on yield is only for
individuals until the hoarding threshold. For companies, Zakat should be
collected based on the Net Worth calculation of shareholders but not as
a percentage of the company income.
Hoarding and Ultimate Beneficiary Owner (UBO): Each country
should determine the hoarding threshold, such as 200 m2 for shelter and
10 hectares for farming, based on their country’s realities. For instance,
agricultural land hoarding levels should be determined to assure commer-
cial viability for scale while encouraging smallholder farmers. Having
smallholder farmers across the globe is an effective way of ensuring food
security compared to mass-scale landowners making smallholder farming
Table 1.3 Discouraging hoarding of land
Residential Commercial Agricultural Industrial

land land land land
Personal use No Zakat No Zakat No Zakat No Zakat

based on based on based on based on
market value market value market value market value
Rent seeking under Zakat, based Zakat, based Zakat, based Zakat, based
hoarding threshold on income on income on outputs on income
Hoarding/speculation Zakat, based Zakat, based Zakat, based Zakat, based
on market on market on market on market
value value value value
Time limit for 99 Hijra years 99 Hijra years 99 Hijra years 99 Hijra
qwnership years
Source The author

economically unviable due to their scale. Zakat should not be calculated

for each property but for the net worth of UBO. Flexibility should be
exercised in terms of commercial and industrial land so long as the land is
used for economic and productive activities. The Zakat should be calcu-
lated based on cash generated from properties so long as holdings are
below the hoarding level calculated based on an individual level as indi-
cated in this instruction “Those which are in separate flocks are not to
be brought together, and those which are in one flock are not to be
separated.” This refers to UBO approach to Zakat charging. The phrase
“those which are in one flock are not to be separated” means if two part-
ners possessed one hundred and one goats each, three goats were to be
given by each of them. When the collector came, they separated their
goats. Thus, only one goat was to be given by each of them. This is what
I heard on this subject (Abu Dawood, 1571).”
In the case example of a person who has a 200 m2 house, 10
hectares of agricultural land to produce agricultural commodities, 2,000
m2 processing factory, and 400 m2 shop to sell their processed commodi-
ties; the Zakat should be calculated based on income but not market
value. After hoarding trashold as Zakat should be calculated based on
hoarded cash. That is, the national hoarding level for cash should also be
defined. If this individual purchases an additional 200 m2 of housing and
10 hectares of agricultural land, Zakat should be calculated based on the
market value of all the assets owned. Not only the real estate hoarded but
also the personally used ones should be subject to Zakat based on market
value.5 If a hoarding level is 200 m2 for a residential unit, a person can
use 100 m2 and rent out the remaining 100 m2 . In this case, Zakat on
rent out can be calculated akin to irrigated land, that is, 5%. If the person
acquired an additional residential unit of 200 m2 , Zakat should be calcu-
lated based on 2.5% of market value from all the assets owned. The same
logic would hold for residential land.
“A tenth is payable on what is watered by rivers, or rains, and a twen-
tieth on what is watered by camels (Sahih Muslim, 981).” This hadith is
the base of Fatwa’s Zakat collection from the income generated from real
estate. These Fatwas give people some saving and passive income oppor-
tunities as long as they do not cross the hoarding level. After the hoarding
5 The one who has 39 sheeps pays Zakat based on produce, if exceeds 40 sheeps, he
pays 2.5% of the assets. Once the hoarding level is exceeded, all the assets are subject to
market value Zakat charge.
16 A. S. GUNDOGDU
level is crossed, Zakat should be implemented based on 2.5% of market

value on all the assets including personal use ones to inhibit hoarding
culture. In this regard, the focus should be on UBO rather than property
or the company, as innovative structures are already used for tax evasion
and wealth hiding.
Getting a Loan to hoard real estate: Leveraging is extensively used
to hoard real estate, and there is an additional motivation in the case of
Islamic Zakat obligation. Since leveraging yields negative net worth, there
would be motivation to leverage and avoid Zakat. Leveraging to hoard
real estate should not be allowed. Conventional finance cannot impose
this since any loan can be used for real estate speculation. On the other
hand, asset-based and asset-backed embedded features of Islamic finance
link the funds with the asset financed directly; hence, such policy is imple-
mentable with Islamic finance. Financing real estate until the hoarding
level is recommendable in Islam while financing real estate after hoarding
should be forbidden.
Another aspect of Zakat in affordable housing is the use of Zakat funds
collected. The Islamic proposition is straightforward: collected Zakat
should be directly distributed to eligible people. Such people are those
facing shelter and food security problems. The Islamic proposition for
poverty is not Zakat. Instead, it is a transition tool. The issue should
be addressed by encouraging work effort. Creating masses dependent
on rich people or the government is not an acceptable notion in Islam
(Gundogdu, 2019a, 2019b). Zakat funds cannot be used to produce
affordable housing for poor people or develop social infrastructures such
as schools, hospitals, water, and sanitation. Social infrastructure develop-
ment is an unalienable part of affordable housing. The Waqf business
model is proposed for social infrastructure (Gundogdu, 2019b). The issue
is discussed in greater detail in Chapter 6.
Zakat from Company Shareholding

The issue of housing and Zakat for companies is expected to get more
attention due to the prevalence of trust or Waqf. It will also attract
scrutiny because many real estate hoarders use intermediate companies
for tax evasion and would do so for Zakat evasion. Although tax evasion
is not Haram in Islam, Zakat evasion is major Haram that could result in
severe divine punishment (Gundogdu, 2019a, 2019b).
Case Box 1.5: Mr. Smith

Mr. Smith drew national attention last year when he gave the commence-
ment address at Morehouse College and announced that he would pay off
the student loans of the roughly 400 graduates
Federal prosecutors said Mr. Smith had signed an agreement acknowl-
edging his involvement in a 15-year scheme to hide more than $200
million in income and evade millions in taxes by using an offshore trust
structure and offshore bank accounts
Under the agreement, the Department of Justice said it would not pros-
ecute Mr. Smith if he paid more than $139 million in taxes and penalties,
abandoned $182 million in charitable deduction claims, and cooperated
with ongoing investigations
Morehouse College confirmed on Friday that Mr. Smith had made
good on his pledge last year when he donated $34 million to pay off
the student loans of the graduates of the class of 2019 and the student
loan debt of their parents and guardians
Mark E. Matthews, a lawyer for Mr. Smith, declined to comment on
Thursday
Mr. Anderson said the agreement showed that “it is never too late to
do the right thing.”
“Although Smith willfully and knowingly violated the law, Smith
has accepted responsibility and agreed to provide complete and truthful
cooperation,” he said
Federal prosecutors said that Mr. Smith used his unreported income to
buy and make improvements to real estate used for his benefit
They said he had used income hidden from taxation to buy and reno-
vate a $2.5 million vacation home in Sonoma, California, to buy two ski
properties and a piece of commercial property in France; and to build and
make improvements to a home in Colorado that was used charitably for
disadvantaged children and wounded veterans
Source NY Times
In Case Box 1.5, Mr. Smith agreed to cooperate with tax authorities
against Mr. Robert, who hid US$ 2 billion in income in 20 years with
whom he cooperated. Evaluating the case from an Islamic perspective
shows the following:
18 A. S. GUNDOGDU
. Zakat obligation is calculated not based on any company’s income

but on individuals’ net worth. Zakat cannot be collected from the
company or trust. Hence, what matters is the Ultimate Beneficiary
Owner (UBO).
. Trust and Waqf have been used for wealth sheltering throughout
history (Adiguzel & Kuran, 2021). Hence, the instrumentality of
Waqf and its genuine role in social infrastructure development
should be well understood.
The subject of company valuation is critical for the Zakat discussion.

There are four main groups of widespread company valuation methods:
balance sheet, income statement-based, cash flow discounting, and mixed
methods, as presented in Table 1.4.
The most accurate valuation method for company valuation is the cash
flow discounting method in conventional finance (Fernandez, 2005). It
assumes the time value of money and discounts the future cash flow
based on the interest rate practiced in the net present value calculation.
However, for Zakat purposes, the Zakat is collected from the wealth, that
is, net worth (assets minus liabilities). In the case of real estate, after the
hoarding level, Zakat is collected based on 2.5% of the market value of all
real estate. In the case of companies, the Zakat should not be collected
from companies based on the income statement or cash flow. Still, it
should be collected from the shareholder based on the market value of
Table 1.4 Company valuation methods
Balance sheet Income statement Cash flow discounting Mixed methods
Book value Price-earning-ratio Free cash flow The classic valuation

method
Adjusted book Value of the dividends Equity cash flow Simplified abbreviated
value goodwill income
Substantial Sales multiples Capital cash flow Risk-bearing and
value risk-free rate method
Liquidation Other multiples based Unlevered value plus Annual profit
value on EBIT and ABITDA the discounted value purchase method
of the tax shield
Note The list in the table is not exhaustive and suggests commonly used methods
Source Fernandez (2005)
their shareholdings. The market value is available for listed companies

based on share prices.
Regarding non-listed companies and SMEs, Zakat’s most appropriate
valuation method is the adjusted book value. Adjusted book value deducts
assets from liabilities after adjusting asset values to reflect the actual
market value. However, off-balance sheet contingent liabilities such as
guarantees should not be factored in for Zakat purposes. Besides, the land
used and machinery for the company’s production should not be part of
the 2.5% Zakat calculation until the hoarding level. The hoarding level
should be defined based on the capacity report of companies that should
indicate the land needed for the company. This is similar to the Zakat
practice in which a house used for family shelter is not included. Hence, in
this delicate balance, there would be no unnecessary stress on the people
worrying about their basic assets and hoarding for speculation and rent-
seeking. This will allow land to be available for expansion or for companies
to be established by future generations or other entrepreneurs. This policy
course would lead to an economic structure in which goods and services
are provided by numerous SMEs but big corporations. Besides, this would
impede stock price inflation, similar to land price inflation, allowing future
generations to access assets. To avoid land hoarding in company names,
land valuation should adequately be conducted, and Zakat should be
reflected in the share values of the shareholders. The Zakat should be
collected based on 2.5% of the real estate of Real Estate Investment Trust
companies. These companies are vehicles for asset hoarding and are not
welcome in an Islamic economic system.
Waqf can also be used to hoard land, money, and real estate to avoid
confiscation and Zakat. For Waqf, as long as the land is endowed and
used for community, Zakat exemption should be there. However, land
ownership should also be limited to 99 Hijri years. It is because Waqf is
for the community, which changes over the generation. We should allow
the next generations to establish their Waqf based on their priorities.
The Role of Waqf

Similar to Zakat, Waqf has an indirect support function in poverty allevia-
tion. Waqf is not a long-term solution proposed for poverty alleviation in
Islam but is a business model for social infrastructure development. Tradi-
tional Waqf presents a business model that substitutes private or public
ownership. This model is most effective with asset management related
20 A. S. GUNDOGDU
to social infrastructure. Examples of such infrastructure include water and

sanitation, education, and health. The role played by Waqf should be
defined given the improper employment of Zakat funds for economic and
social infrastructure like highways, bridges, libraries, schools, and hospi-
tals (Anwar, 1995; Qaradhawi, 1995). Based on the Third Symposium
of Zakat Contemporary Issues’ Decress No.1 on Zakat Funds invest-
ment, permits for the use of Zakat in funding the development of social
infrastructure. However, analysis of the prevailing situation would show
a contradiction between practice and what is expected regarding wealth
distribution. Waqf is supposed to deal with the issue of the development
of social infrastructure, which is supposed to be an act of benevolence.
On this basis, the Waqf idea developed as a distinct charity implemented
in Islam, apart from Zakat. Undoubtedly, as a legal vehicle, the Islamic
Waqf model is perceived as an inspiration for secular foundations, endow-
ments, and trusts (Cizakca, 2000). Nonetheless, major differences exist
between Waqf and trusts.6
Both private and public social infrastructure ownerships have conse-
quences leading to issues related to fairness and sustainability. With
its fundamental principles of irrevocability, inalienability, and perpe-
tuity, Waqf ensures that assets are managed in an appropriate manner
based on engaging the community to meet basic social infrastructure
needs. Regarding private ownership, when human needs are turned into
commodities, the inevitable result for society is inequality. In public
ownership, the two main issues are related to maintenance and corrup-
tion. Waqf presents a feasible business model for engaging communities
that benefit from the services of assets (Mawquf Alaihi). However,
the application of Waqf throughout history has not been completely
connected to the development of social infrastructure. It is common to
see people resorting to the Waqf mechanism if they want to avoid paying
taxes or having their investments confiscated by the state (Kuran, 2001).7
Using Waqf in such circumstances is rational behavior. The first reason to
support this view is that Islamic economies wave aside tax collection-based
6 For example, in a trust, the property ownership vest with trustee, in case of Waqf
ownership vest with Allah. Waqif (Waqf endower) does not have power to revoke Waqf,
while in case of trust settlor can revoke trust.
7 Kuran (2001) provided detailed numbers in case of Ottoman Awqaf in this context.
systems.8 The second is that Islamic jurisprudence protects inheritance

rights to the degree that it is not possible for an individual to allocate all
their inheritable assets to Waqf.9 From this perspective, regarding taxes
and limitations to rightful inheritance by the state, individuals often resort
to the second most optimal solution: the creation of a family Waqf. The
first best option is to have an economic system without tax obligations,
and wealth transfer to future generations with inheritance has not been
observed. Since Zakat is not collected from Waqf, Waqf can become a real
estate hoarding tool.
In Islam, wealth accumulation is encouraged until the hoarding
threshold because it leads to people that live independently and have the
opportunity to make their voices heard in society. With wealth accumula-
tion until the threshold, people have the kind of resources that will make
them voice their concerns in a way that the poor would not when faced
with heavy-handedness from the authorities. Therefore, it can be said that
when wealth is in the hands of individuals, repression is unlikely to be
widespread. However, if wealth accumulation is uncontrolled and only
a few individuals or states, like the communist establishments, hold the
majority of resources, the benefits of such wealth in averting repression
will not be felt by the greater society. For example, when wealth accumu-
lation in the hands of a few leads to the hoarding of real estate, a bigger
problem is created since it will undermine shelter provision to families
and facility space for companies (Buckley et al., 2009).
The ideal situation is where every person has some assets, and where
wealth is not held at the expense of Waqf, Sadaqah, and Infaq. To accom-
plish this idea, Zakat should be employed as a way of redistributing wealth
so that a growing number of people with a certain level of wealth can have
a free say on issues affecting the community.
It is vital to discern the connection between Waqf and Zakat. For
instance, it must be clear that wealth allocated to Waqf does not constitute
a part of the Zakat base. This is the other reason behind the popularity of
the family Waqf. Even though tax evasion and protection of assets from
8 Refers to prohibition of tax collection by Muhammad (PBUH) at the establishment

of Medina Market. M. J. Kister (1965), “The Market of the Prophet”, Journal of the
Economic and Social History of the Orient, 8(3), 272–276.
9 Page-33, Obaidullah M. (2013). Awqaf Development and Management. Islamic
Research and Training Institute, Islamic Development Bank: Jeddah: Saudi Arabia.
22 A. S. GUNDOGDU
being confiscated may seem like rational causes for family Waqf, it is not
acceptable for an individual to avoid Zakat.
The “charity begins at home” principle is associated with Infaq and
inheritance, not Waqf. In Islam, the concept of Infaq and inheritance
is to prepare kids for the future. Such preparation involves ensuring
that they get the highest quality education to prepare them for the
changing technology. From a certain degree of inherited wealth, these
future generations will generate adequate wealth to sustain their families
and contribute to society with Zakat, Waqf, and Sadaqah. Although it is
unacceptable to evade Zakat with Family Waqf, as it was presented with
cash-in-kind Zakat payment using company shares (Corporate Waqf),
paying Zakat can be postponed with a temporary cash Waqf model.
However, temporary Waqf does not always meet all the requirements of
traditional Waqf: irrevocability, inalienability, and perpetuity. It is equally
important to note that these principles are not founded on the teachings
of the Qur’an and could be revisited as long as the main aim is to use
Waqf to deliver social infrastructure to those that need it. It is possible
that the principles of irrevocability, inalienability, and perpetuity of tradi-
tional Waqf could have been introduced due to concerns surrounding
people who established family Waqf with ulterior motives.
The principles of irrevocability, inalienability, and perpetuity stipulate
that a Waqf asset (Mawquf) should not be sold. However, Hukr contracts
circumvent this principle, which also permits one to inherit Hukr in prac-
tice. Added to this, there are many instances of Istibdal, which involves
changing Waqf assets with new assets, and Ibdal, involving changing Waqf
assets with cash, recorded in history (Heyneman, 2004). Such practices
are already not in keeping with the traditional Waqf principles of irrevoca-
bility, inalienability, and perpetuity. Undoubtedly, temporary cash Waqf
is tolerable because it is justified with comparable economic benefits for
the development of social infrastructure and guarantees Muzakki with
financial sustainability concerns. Concerning this, temporary cash Waqf
is comparable to the corporate Waqf approach.
While the company’s focus is on making as much profit as possible
and that of cash Waqf if maximizing return on investment, the dividend
payments from a company maximizing profit and the return on invest-
ment from cash Waqf can be used in projects involving the development
of social infrastructure.10 Thus, it can be posited that there is a need

for a mechanism for developing social infrastructure with cash Waqf and
corporate Waqf.11
The shareholders in a company or individuals may agree to defer a
part of their Zakat obligation with temporary cash Waqf and corporate
cash Waqf. This type of postponement is generally acceptable because
it deals with apprehensions related to the Muzakki (the party with the
obligation to give Zakat) and the Mustahiq (the party eligible to receive
Zakat). While the Muzakki may have wealth at a certain period, they may
not be sure of the future at a specific moment because economic condi-
tions could change and leave such an individual poor. Thus, when the
temporary Waqf is terminated, the concerned individual may have access
to wealth. If the conditions improve or remain as they are, that person
may continue allocating the wealth to temporary Waqf. Regarding people
in need, the return on money in temporary cash Waqf could be invested as
Qard Hasan, where the return on investment is used to pay for the devel-
opment of social infrastructures like water and sanitation, health clinics,
and schools. In contrast, the principal amount is returned to whoever
originally owned it (Gundogdu, 2018). These social infrastructures are
an inalienable part of sustainable cities and the provision of affordable
housing. Using temporary Waqf return on investment is an appropriate
solution for dealing with needs relating to infrastructure development
(Gundogdu, 2018).12 Obaidullah (2013) provides another definition of
Waqf: “withholding an asset while releasing its usufruct.”
It can be posited that finite Waqf as a replacement for permanent Waqf
could be the solution. From a traditional perspective, Waqf is a business
model for delivering social goods, which is better off when not commodi-
tized. Examples of such social goods include water supply, health services,
and education. The corporate Waqf or temporary cash Waqf models can
better provide resources to develop these social goods if one considers
10 The Cash Waqf seeking high-risk investment for profit maximization categorized as
investment bank by some scholar, while Cash Waqf categorized for Waqf administered
based on zero-downside risk with moderate return approach.
11 Obaidullah (2013) provided permissibility of such Waqf in the context of legal
comparison across the countries.
12 Indeed, the men who practice charity and the women who practice charity and [they
who] have loaned Allah a goodly loan—it will be multiplied for them, and they will have
a noble reward (57:18).
24 A. S. GUNDOGDU
society’s changing needs. The models also address the bottlenecks associ-
ated with traditional Waqf. The agent/principal problem is more severe
in Waqf if there is no mechanism to hinder misappropriation or misman-
agement by Nazir/Mutavalli (Trustee-Manager), especially following the
death of the Waqif (Waqf Endower). Hence, social infrastructure, such as
schools and clinics, should be under the control of the community Waqf,
which the inhabitants of the land control.
State Housing Development Projects

Should the state intervene in housing development projects? As a busi-
ness, no, but for regulating the market with best practices and stabilizing
the house prices as part of Hisbah, yes. There are many benefits of state
involvement in housing development programs:
. State housing development programs, in collaboration with private

developers, can ensure that housing development is done with social
infrastructure attached. It also ensures that resilient infrastructure is
developed and needed standard elements embedded in the houses.
. The state can set housing development standards.
. State housing programs with private developers would stabilize
house prices as it can indicate the price of houses with essential
standards.
. State housing programs with developers can institute benchmarks for
Islamic mortgage development and securitization.
State housing development entities, delegating construction business to

the private sector, can utilize 99 years rotated lands for affordable, green,
and resilient housing projects. The expected return on Islamic mortgages
can be securitized via Sukuk Ijara and be an investment opportunity for
pension funds and Takaful companies. This policy should also accommo-
date rules and regulations to hinder significant buildings from ensuring
the land can be usable by the next generations.
The housing policy should be developed neither with an unbearable
fiscal burden on the public sector nor without creating additional risk
for the financial sector. The next chapter elaborates on pertinent Islamic
perspectives to provide the best model. While this chapter focused on
land use policy reform, the next chapter will focus on different financial
products and resource mobilization models to provide affordable housing.
References
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tion and its role in environmental conservation in Islamic civilization. Jurnal
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CHAPTER 2
Islamic Mortgages and Securitization

Channeling funds for housing development without
leading to systematic banking risk
Many conventional finance books are written to perpetuate a system

where some become rich at the expense of others in what can be consid-
ered a zero-sum game. The Islamic view of finance is based on ensuring
that financing tools are utilized in a way to improve the health of society
by protecting families that are cornered by the as-is financial system.
A significant characteristic of housing finance is the relatively big size
and long-term financing horizon. The higher the housing price relative
to household income, the longer the tenor gets. The previous chapter
discussed the policy course to decrease housing prices. The decreased
prices would substantially reduce the resource mobilization needed by
the financial sector and risk in resource mobilization and securitization
with the decreased time horizon of financing. This perspective is based
on the objective of decreasing household debt to spare more resources for
future generations’ emotional, mental, and physical development. While
this policy may be detrimental to land hoarders, bonus getting bankers,
it favors society in general. Without integration of housing financing into
the formal financial system, however, self-finance with equity or direct
finance between individuals gives rise to cities as they are financed: units
with low standards and slum proliferation. The Pareto-optimum solu-
tion appears to engage the formal financial sector in housing finance with
© The Author(s), under exclusive license to Springer Nature 27

Switzerland AG 2023
A. S. Gundogdu, Food Security, Affordable Housing, and Poverty,
Palgrave Studies in Islamic Banking, Finance, and Economics,
https://doi.org/10.1007/978-3-031-27689-7_2
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“Well, they are all at your service. I have brought you my
duplicate latchkey and you will find the volumes of the diary in the
glazed book-case. It is usually kept locked, but as nobody but you
will have access to the chambers while I am away, I shall leave the
key in the lock.”
“This is really very good of you, Mayfield,” he said, as I rose to
take my departure. “Let me have your address, wherever you may
be for the time being, and I will keep you posted in any
developments that may occur. And now, good-bye and good luck!”
He shook my hand cordially and I betook myself to my chambers to
complete my preparations for my start on the morrow.
Chapter X.
A Greek Gift
The incidents of my life while I was following the Southeastern
Circuit are no part of this history, and I refer to this period merely by
way of marking the passage of time. Indeed, it was its separateness,
its detachment from the other and more personal aspects of my life
that specially commended it to me. In the cheerful surroundings of
the Bar Mess I could forget the terrible experiences of the last few
weeks, and even in the grimmer and more suggestive atmosphere of
the courts, the close attention that the proceedings demanded kept
my mind in a state of wholesome preoccupation.
Quite a considerable amount of work came my way, and though
most of the briefs were small—so small, often, that I felt some
compunction in taking them from the more needy juniors—yet it was
all experience and what was more important just now, it was
occupation that kept my mind employed.
That was the great thing. To keep my mind busy with matters that
were not my personal concern. And the intensity of my yearning for
distraction was the measure of the extent to which my waking
thoughts tended to be pervaded by the sinister surroundings of
Harold Monkhouse’s death. That dreadful event and the mystery that
encompassed it had shaken me more than I had at first realized. Nor
need this be a matter for surprise. Harold Monkhouse had apparently
been murdered; at any rate that was the accepted view. And who
was the murderer? Evade the answer as I would, the fact remained
that the finger of suspicion pointed at my own intimate friends—nay,
even at me. It is no wonder, then, that the mystery haunted me.
Murder has an ominous sound to any ears; but to a lawyer practising
in criminal courts the word has connotations to which his daily
experiences impart a peculiarly hideous vividness and realism.
Once, I remember that, sitting in court, listening to the evidence in a
trial for murder, as my glance strayed to the dock where the prisoner
stood, watched and guarded like a captured wild beast, the thought
suddenly flashed on me that it was actually possible—and to the
police actually probable—that thus might yet stand Wallingford or
Madeline, or even Barbara or myself.
It would have been possible for me to run home from time to time
at week-ends but I did not. There was nothing that called for my
presence in London and it was better to stick close to my work. Still, I
was not quite cut off from my friends, for Barbara wrote regularly and
I had an occasional letter from Madeline. As to Thorndyke, he was
too busy to write unnecessary letters and his peculiar circumstances
made a secretary impossible, so that I had from him no more than
one or two brief notes reporting the absence of any new
developments. Nor had Barbara much to tell excepting that she had
decided to let or sell the house in Hilborough Square and take up her
residence in a flat. The decision did not surprise me. I should
certainly have done the same in her place; and I was only faintly
surprised when I learned that she proposed to live alone and that
Madeline had taken a small flat near the school. The two women had
always been on excellent terms, but they were not specially devoted
to one another; and Barbara would now probably pursue her own
special interests. Of Wallingford I learned only that, on the strength
of his legacy he had taken a set of rooms in the neighbourhood of
Jermyn Street and that his nerves did not seem to have benefited by
the change.
Such was the position of affairs when the Autumn Assizes came
to an end and I returned home. I remember the occasion very vividly,
as I have good reason to do—indeed, I had better reason than I
knew at the time. It was a cold, dark, foggy evening, though not
densely foggy, and my taxicab was compelled to crawl at an almost
funereal pace (to the exasperation of the driver) through the murky
streets, though the traffic was now beginning to thin out. We
approached the Temple from the east and eventually entered by the
Tudor Street Gate whence we crept tentatively across King’s Bench
Walk to the end of Crown Office Row. As we passed Thorndyke’s
chambers I looked up and had a momentary glimpse of lighted
windows glimmering through the fog; then they faded away and I
looked out on the other side where the great shadowy mass of Paper
Buildings loomed above us. A man was standing at the end of the
narrow passage that leads to Fig Tree Court—a tallish man wearing
a preposterous wide-brimmed hat and a long overcoat with its collar
turned up above his ears. I glanced at him incuriously as we
approached but had no opportunity to inspect him more closely, if I
had wished—which I did not—for, as the cab stopped he turned
abruptly and walked away up the passage. The suddenness of his
retirement struck me as a little odd and, having alighted from the
cab, I stood for a moment or two watching his receding figure. But he
soon disappeared in the foggy darkness, and I saw him no more. By
the time that I had paid my fare and carried my portmanteau to Fig
Tree Court, he had probably passed out into Middle Temple Lane.
When I had let myself into my chambers, switched on the light
and shut the door, I looked round my little domain with somewhat
mixed feelings. It was very silent and solitary. After the jovial Bar
Mess and the bright, frequented rooms of the hotels or the excellent
lodgings which I had just left, these chambers struck me as just a
shade desolate. But yet there were compensations. A sense of
peace and quiet pervaded the place and all around were my
household gods; my familiar and beloved pictures, the little friendly
cabinet busts and statuettes, and, above all, the goodly fellowship of
books. And at this moment my glance fell on the long range of my
diaries and I noticed that one of the series was absent. Not that there
was anything remarkable in that, since I had given Thorndyke
express permission to take them away to read. What did surprise me
a little was the date of the missing volume. It was that of the year
before Stella’s death. As I noted this I was conscious of a faint sense
of annoyance. I had, it is true, given him the free use of the diary, but
only for purposes of reference. I had hardly bargained for his perusal
of the whole series for his entertainment. However, it was of no
consequence. The diary enshrined no secrets. If I had, in a way,
emulated Pepys in respect of fulness, I had taken warning from his
indiscretions; nor, in fact, was I quite so rich in the material of
indiscreet records as the vivacious Samuel.
I unpacked my portmanteau—the heavier impedimenta were
coming on by rail—lit the gas fire in my bedroom, boiled a kettle of
water, partly for a comfortable wash and partly to fill a hotwater bottle
wherewith to warm the probably damp bed, and then, still feeling a
little like a cat in a strange house, decided to walk along to
Thorndyke’s chambers and hear the news, if there were any.
The fog had grown appreciably denser when I turned out of my
entry, and, crossing the little quadrangle, strode quickly along the
narrow passage that leads to the Terrace and King’s Bench Walk. I
was approaching the end of the passage when there came suddenly
into view a shadowy figure which I recognized at once as that of the
man whom I had seen when I arrived. But again I had no opportunity
for a close inspection, for he had already heard my footsteps and he
now started to walk away rapidly in the direction of Mitre Court. For a
moment I was disposed to follow him, and did, in fact, make a few
quick steps towards him—which seemed to cause him to mend his
pace; but it was not directly my business to deal with loiterers, and I
could have done nothing even if I had overtaken him. Accordingly I
changed my direction, and crossing King’s Bench Walk, bore down
on Thorndyke’s entry.
As I approached the house I was a little disconcerted to observe
that there were now no lights in his chambers, though the windows
above were lighted. I ran up the stairs, and finding the oak closed,
pressed the electric bell, which I could hear ringing on the floor
above. Almost immediately footsteps became audible descending
the stairs and were followed by the appearance of a small gentleman
whom I recognized as Thorndyke’s assistant, artificer or familiar
spirit, Mr. Polton. He recognized me at the same moment and
greeted me with a smile that seemed to break out of the corners of
his eyes and spread in a network of wrinkles over every part of his
face; a sort of compound smile inasmuch as every wrinkle seemed
to have a smile of its own.
“I hope, Mr. Polton,” said I, “that I haven’t missed the doctor.”
“No, Sir,” he replied. “He is up in the laboratory. We are just about
to make a little experiment.”
“Well, I am in no hurry. Don’t disturb him. I will wait until he is at
liberty.”
“Unless, Sir,” he suggested, “you would like to come up. Perhaps
you would like to see the experiment.”
I closed with the offer gladly. I had never seen Thorndyke’s
laboratory and had often been somewhat mystified as to what he did
in it. Accordingly I followed Mr. Polton up the stairs, at the top of
which I found Thorndyke waiting.
“I thought it was your voice, Mayfield,” said he, shaking my hand.
“You are just in time to see us locate a mare’s nest. Come in and
lend a hand.”
He led me into a large room around which I glanced curiously
and not without surprise. One side was occupied by a huge copying
camera, the other by a joiner’s bench. A powerful back-geared lathe
stood against one window, a jeweller’s bench against the other, and
the walls were covered with shelves and tool-racks, filled with all
sorts of strange implements. From this room we passed into another
which I recognized as a chemical laboratory, although most of the
apparatus in it was totally unfamiliar to me.
“I had no idea,” said I, “that the practice of Medical Jurisprudence
involved such an outfit as this. What do you do with it all? The place
is like a factory.”
“It is a factory,” he replied with a smile; “a place where the raw
material of scientific evidence is worked up into the finished product
suitable for use in courts of law.”
“I don’t know that that conveys much to me,” said I. “But you are
going to perform some sort of experiment; perhaps that will enlighten
me.”
“Probably it will, to some extent,” he replied, “though it is only a
simple affair. We have a parcel here which came by post this
evening and we are going to see what is in it before we open it.”
“The devil you are!” I exclaimed. “How in the name of Fortune are
you going to do that?”
“We shall examine it by means of the X-rays.”
“But why? Why not open it and find out what is in it in a
reasonable way?”
Thorndyke chuckled softly. “We have had our little experiences,
Mayfield, and we have grown wary. We don’t open strange parcels
nowadays until we are sure that we are not dealing with a ‘Greek gift’
of some sort. That is what we are going to ascertain now in respect
of this.”
He picked up from the bench a parcel about the size of an
ordinary cigar-box and held it out for my inspection. “The
overwhelming probabilities are,” he continued, “that this is a perfectly
innocent package. But we don’t know. I am not expecting any such
parcel and there are certain peculiarities about this one that attract
one’s attention. You notice that the entire address is in rough Roman
capitals—what are commonly called ‘block letters.’ That is probably
for the sake of distinctness; but it might possibly be done to avoid a
recognizable handwriting or a possibly traceable typewriter. Then
you notice that it is addressed to ‘Dr. Thorndyke’ and conspicuously
endorsed ‘personal.’ Now, that is really a little odd. One understands
the object of marking a letter ‘personal’—to guard against its being
opened and read by the wrong person. But what does it matter who
opens a parcel?”
“I can’t imagine why it should matter,” I admitted without much
conviction, “but I don’t see anything in the unnecessary addition that
need excite suspicion. Do you?”
“Perhaps not; but you observe that the sender was apparently
anxious that the parcel should be opened by a particular person.”
I shrugged my shoulders. The whole proceeding and the reasons
given for it struck me as verging on farce. “Do you go through these
formalities with every parcel that you receive?” I asked.
“No,” he replied. “Only with those that are unexpected or offer no
evidence as to their origin. But we are pretty careful. As I said just
now, we have had our experiences. One of them was a box which,
on being opened, discharged volumes of poisonous gas.”
“The deuce!” I exclaimed, rather startled out of my scepticism and
viewing the parcel with a new-born respect, not unmixed with
apprehension. “Then this thing may actually be an infernal machine!
Confound it all, Thorndyke! Supposing it should have a clockwork
detonator, ticking away while we are talking. Hadn’t you better get on
with the X-rays?”
He chuckled at my sudden change of attitude. “It is all right,
Mayfield. There is no clockwork. I tried it with the microphone as
soon as it arrived. We always do that. And, of course, it is a
thousand to one that it is just an innocent parcel. But we will just
make sure and then I shall be at liberty for a chat with you.”
He led the way to a staircase leading to the floor above where I
was introduced to a large, bare room surrounded by long benches or
tables occupied by various uncanny-looking apparatus. As soon as
we entered, he placed the parcel on a raised stand while Polton
turned a switch connected with a great coil; the immediate result of
which was a peculiar, high-pitched, humming sound as if a gigantic
mosquito had got into the room. At the same moment a glass globe
that was supported on an arm behind the parcel became filled with
green light and displayed a bright red spot in its interior.
“This is a necromantic sort of business, Thorndyke,” said I, “only
you and Mr. Polton aren’t dressed for the part. You ought to have tall,
pointed caps and gowns covered with cabalistic signs. What is that
queer humming noise?”
“That is the interrupter,” he replied. “The green bulb is the
Crookes’s tube and the little red-hot disc inside it is the anti-cathode.
I will tell you about them presently. That framed plate that Polton has
is the fluorescent screen. It intercepts the X-rays and makes them
visible. You shall see, when Polton has finished his inspection.”
I watched Polton—who had taken the opportunity to get the first
innings—holding the screen between his face and the parcel. After a
few moments’ inspection he turned the parcel over on its side and
once more raised the screen, gazing at it with an expression of the
most intense interest. Suddenly he turned to Thorndyke with a smile
of perfectly incredible wrinkliness and, without a word, handed him
the screen; which he held up for a few seconds and then silently
passed to me.
I had never used a fluorescent screen before and I must confess
that I found the experience most uncanny. As I raised it before the
parcel behind which was the glowing green bulb, the parcel became
invisible but in its place appeared the shadow of a pistol the muzzle
of which seemed to be inserted into a jar. There were some other,
smaller shadows, of which I could make nothing, but which seemed
to be floating in the air.
“Better not look too long, Mayfield,” said Thorndyke. “X-rays are
unwholesome things. We will take a photograph and then we can
study the details at our leisure; though it is all pretty obvious.”
“It isn’t to me,” said I. “There is a pistol and what looks like a jar.
Do you take it that they are parts of an infernal machine?”
“I suppose,” he replied, “we must dignify it with that name. What
do you say, Polton?”
“I should call it a booby-trap, Sir,” was the reply. “What you might
expect from a mischievous boy of ten—rather backward for his age.”
Thorndyke laughed. “Listen to the artificer,” said he, “and observe
how his mechanical soul is offended by an inefficient and
unmechanical attempt to blow us all up. But we won’t take the
inefficiency too much for granted. Let us have a photograph and then
we can get to work with safety.”
It seemed that this part also of the procedure was already
provided for in the form of a large black envelope which Polton
produced from a drawer and began forthwith to adjust in contact with
the parcel; in fact the appearance of preparedness was so striking
that I remarked:
“This looks like part of a regular routine. It must take up a lot of
your time.”
“As a matter of fact,” he replied, “we don’t often have to do this. I
don’t receive many parcels and of those that are delivered, the
immense majority come from known sources and are accompanied
by letters of advice. It is only the strange and questionable packages
that we examine with the X-rays. Of course, this one was suspect at
a glance with that disguised handwriting and the special direction as
to who should open it.”
“Yes, I see that now. But it must be rather uncomfortable to live in
constant expectation of having bombs or poison-gas handed in by
the postman.”
“It isn’t as bad as that,” said he. “The thing has happened only
three or four times in the whole of my experience. The first gift of the
kind was a poisoned cigar, which I fortunately detected and which
served as a very useful warning. Since then I have kept my weather
eyelid lifting, as the mariners express it.”
“But don’t you find it rather wearing to be constantly on the look-
out for some murderous attack?”
“Not at all,” he answered with a laugh. “It rather adds to the zest
of life. Besides, you see, Mayfield, that on the rare occasions when
these trifles come my way, they are so extremely helpful.”
“Helpful!” I repeated. “In the Lord’s name, how?”
“In a number of ways. Consider my position, Mayfield. I am not
like an Italian or Russian politician who may have scores of
murderous enemies. I am a lawyer and an investigator of crime.
Whoever wants to get rid of me has something to fear from me; but
at any given time, there will not be more than one or two of such
persons. Consequently, when I receive a gift such as the present
one, it conveys to me certain items of information. Thus it informs me
that some one is becoming alarmed by some proceedings on my
part. That is a very valuable piece of information, for it tells me that
some one of my inquiries is at least proceeding along the right lines.
It is virtually an admission that I have made, or am in the way of
making a point. A little consideration of the cases that I have in hand
will probably suggest the identity of the sender. But on this question
the thing itself will, in most cases yield quite useful information as
well as telling us a good deal about the personality of the sender.
Take the present case. You heard Polton’s contemptuous
observations on the crudity of the device. Evidently the person who
sent this is not an engineer or mechanician of any kind. There is an
obvious ignorance of mechanism; and yet there is a certain simple
ingenuity. The thing is, in fact, as Polton said, on the level of a
schoolboy’s booby-trap. You must see that if we had in view two or
more possible senders, these facts might enable us to exclude one
and select another. But here is Polton with the photograph. Now we
can consider the mechanism at our leisure.”
As he spoke, Polton deposited on the bench a large porcelain
dish or tray in which was a very odd-looking photograph; for the
whole of it was jet-black excepting the pistol, the jar, the hinges, and
a small, elongated spot, which all stood out in clear, white silhouette.
“Why,” I exclaimed as I stooped over it, “that is a muzzle-loading
pistol!”
“Yes,” Thorndyke agreed, “and a pocket pistol, as you can tell by
the absence of a trigger-guard. The trigger is probably hinged and
folds forward into a recess. I daresay you know the kind of thing.
They were usually rather pretty little weapons—and useful, too, for
you could carry one easily in your waistcoat pocket. They had
octagon barrels, which screwed off for loading, and the butts were
often quite handsomely ornamented with silver mounts. They were
usually sent out by the gunsmiths in little baize-lined mahogany
cases with compartments for a little powder-flask and a supply of
bullets.”
“I wonder why he used a muzzle-loader?” said I.
“Probably because he had it. It answers the purpose as well as a
modern weapon, and, as it was probably made more than a hundred
years ago, it would be useless to go round the trade enquiring as to
recent purchases.”
“Yes, it was safer to use an old pistol than to buy a new one and
leave possible tracks. But how does the thing work? I can see that
the hammer is at full cock and that there is a cap on the nipple. But
what fires the pistol?”
“Apparently a piece of string, which hasn’t come out in the
photograph except, faintly, just above that small mark—string is not
dense enough to throw a shadow at the full exposure—but you see,
about an inch behind the trigger, an elongated shadow. That is
probably a screw-eye seen end-ways. The string is tied to the trigger,
passed through the screw-eye and fastened to the lid of the box. I
don’t see how. There is no metal fastening, and you see that the lid
is not screwed or nailed down. As to how it works; you open the lid
firmly; that pulls the string tight; that pulls back the trigger and fires
the pistol into the jar, which is presumably full of some explosive; the
jar explodes and—up goes the donkey. There is a noble simplicity
about the whole thing. How do you propose to open it, Polton?”
“I think, Sir,” replied the latter, “we had better get the paper off
and have a look at the box.”
“Very well,” said Thorndyke, “but don’t take anything for granted.
Make sure that the paper isn’t part of the joke.”
I watched Polton with intense—and far from impersonal—
interest, wishing only that I could have observed him from a
somewhat greater distance. But for all his contempt for the “booby-
trap,” he took no unnecessary risks. First, with a pair of scissors, he
cut out a piece at the back and enlarged the opening so that he
could peer in and inspect the top of the lid. When he had made sure
that there were no pitfalls, he ran the scissors round the top and
exposed the box, which he carefully lifted out of the remainder of the
wrapping and laid down tenderly on the bench. It was a cigar-box of
the flat type and presented nothing remarkable excepting that the lid,
instead of being nailed or pinned down, was secured by a number of
strips of stout adhesive paper, and bore, near the middle, a large
spot of sealing-wax.
“That paper binding is quite a happy thought,” remarked
Thorndyke, “though it was probably put on because our friend was
afraid to knock in nails. But it would be quite effective. An impatient
man would cut through the front strips and then wrench the lid open.
I think that blob of sealing-wax answers our question about the
fastening of the string. The end of it was probably drawn through a
bradawl hole in the lid and fixed with sealing wax. But it must have
been an anxious business drawing it just tight enough and not too
tight. I suggest, Polton, that an inch and-a-half centre-bit hole just
below and to the right of the sealing-wax would enable us to cut the
string. But you had better try it with the photograph first.”
Polton picked the wet photograph out of the dish and carefully
laid it on the lid of the box, adjusting it so that the shadows of the
hinges were opposite the actual hinges. Then with a marking-awl he
pricked through the shadow of the screw-eye, and again about two
inches to the right and below it.
“You are quite right, Sir,” said he as he removed the photograph
and inspected the lid of the box. “The middle of the wax is exactly
over the screw-eye. I’ll just get the centre-bit.”
He bustled away down the stairs and returned in less than a
minute with a brace and a large centre-bit, the point of which he
inserted into the second awl-hole. Then, as Thorndyke grasped the
box (and I stepped back a pace or two), he turned the brace lightly
and steadily, stopping now and again to clear away the chips and
examine the deepening hole. A dozen turns carried the bit through
the thin lid and the remaining disc of wood was driven into the
interior of the box. As soon as the hole was clear, he cautiously
inserted a dentist’s mirror, which he had brought up in his pocket,
and with its aid examined the inside of the lid.
“I can see the string, Sir,” he reported; “a bit of common white
twine and it looks quite slack. I could reach it easily with a small pair
of scissors.”
He handed the mirror to Thorndyke, who, having confirmed his
observations, produced a pair of surgical scissors from his pocket.
These Polton cautiously inserted into the opening, and as he closed
them there was an audible snip. Then he slowly withdrew them and
again inserted the mirror.
“It’s all right,” said he. “The string is cut clean through. I think we
can open the lid now.” With a sharp penknife he cut through the
paper binding-strips and then, grasping the front of the lid, continued:
“Now for it. Perhaps you two gentlemen had better stand a bit farther
back, in case of accidents.”
I thought the suggestion an excellent one, but as Thorndyke
made no move, I had not the moral courage to adopt it.
Nevertheless, I watched Polton’s proceedings with my heart in my
mouth. Very slowly and gently did that cunning artificer raise the lid
until it had opened some two inches, when he stooped and peered
in. Then, with the cheerful announcement that it was “all clear,” he
boldly turned it right back.
Of course, the photograph had shown us, in general, what to
expect, but there were certain details that had not been represented.
For instance, both the pistol and the jar were securely wedged
between pieces of cork—sections of wine-bottle corks, apparently—
glued to the bottom of the box.
“How is it,” I asked, “that those corks did not appear in the
photograph?”
“I think there is a faint indication of them,” Thorndyke replied; “but
Polton gave a rather full exposure. If you want to show bodies of
such low density as corks, you have to give a specially short
exposure and cut short the development, too. But I expect Polton
saw them when he was developing the picture, didn’t you, Polton?”
“Yes,” the latter replied; “they were quite distinct at one time, but
then I developed up to get the pistol out clear.”
While these explanations were being given, Polton proceeded
methodically to “draw the teeth” of the infernal apparatus. First, he
cut a little wedge of cork which he pushed in between the
threatening hammer and the nipple and having thus fixed the former
he quietly removed the percussion-cap from the latter; on which I
drew a deep breath of relief. He next wrenched away one of the
corks and was then able to withdraw the pistol from the jar and lift it
out of the box. I took it from him and examined it curiously, not a little
interested to note how completely it corresponded with Thorndyke’s
description. It had a blued octagon barrel, a folding trigger which
fitted snugly into a recess, a richly-engraved lock-plate and an ebony
butt, decorated with numbers of tiny silver studs and a little lozenge-
shaped scutcheon-plate on which a monogram had been engraved
in minute letters, which, however, had been so thoroughly scraped
out that I was unable to make out or even to guess what the letters
had been.
My investigations were cut short by Thorndyke, who, having
slipped on a pair of rubber gloves now took the pistol from me,
remarking: “You haven’t touched the barrel, I think, Mayfield?”
“No,” I answered; “but why do you ask?”
“Because we shall go over it and the jar for finger-prints. Not that
they will be much use for tracing the sender of this present, but they
will be valuable corroboration if we catch him by other means; for
whoever sent this certainly had a guilty conscience.”
With this he delicately lifted out the jar—a small, dark-brown
stoneware vessel such as is used as a container for the choicer
kinds of condiments—and inverted it over a sheet of paper, upon
which its contents, some two or three tablespoonfuls of black
powder, descended and formed a small heap.
“Not a very formidable charge,” Thorndyke remarked, looking at it
with a smile.
“Formidable!” repeated Polton. “Why, it wouldn’t have hurt a fly!
Common black powder such as old women use to blow out the
copper flues. He must be an innocent, this fellow—if it is a he,” he
added reflectively.
Polton’s proviso suddenly recalled to my mind the man whom I
had seen lurking at the corner of Fig Tree Court. It was hardly
possible to avoid connecting him with the mysterious parcel, as
Thorndyke agreed when I had described the incident.
“Yes,” exclaimed Polton, “of course. He was waiting to hear the
explosion. It is a pity you didn’t mention it sooner, Sir. But he may be
waiting there still. Hadn’t I better run across and see?”
“And suppose he is there still,” said Thorndyke. “What would you
propose to do?”
“I should just pop up to the lodge and tell the porter to bring a
policeman down. Why we should have him red-handed.”
Thorndyke regarded his henchman with an indulgent smile. “Your
handicraft, Polton,” said he, “is better than your law. You can’t arrest
a man without a warrant unless he is doing something unlawful. This
man was simply standing at the corner of Fig Tree Court.”
“But,” protested Polton, “isn’t it unlawful to send infernal
machines by parcel post?”
“Undoubtedly it is,” Thorndyke admitted, “but we haven’t a
particle of evidence that this man has any connection with the parcel
or with us. He may have been waiting there to meet a friend.”
“He may, of course,” said I, “but seeing that he ran off like a lamp-
lighter on both the occasions when I appeared on the scene, I should
suspect that he was there for no good. And I strongly suspect him of
having some connection with this precious parcel.”
“So do I,” said Thorndyke. “As a matter of fact, I have once or
twice, lately, met a man answering to your description, loitering about
King’s Bench Walk in the evening. But I think it much better not to
appear to notice him. Let himself think himself unobserved and
presently he will do something definite that will enable us to take
action. And remember that the more thoroughly he commits himself
the more valuable his conduct will be as indirect evidence on certain
other matters.”
I was amused at the way in which Thorndyke sank all
considerations of personal safety in the single purpose of pursuing
his investigations to a successful issue. He was the typical
enthusiast. The possibility that this unknown person might shoot at
him from some ambush, he would, I suspected, have welcomed as
offering the chance to seize the aggressor and compel him to
disclose his motives. Also, I had a shrewd suspicion that he knew or
guessed who the man was and was anxious to avoid alarming him.
“Well,” he said when he had replaced the pistol and the empty jar
in the box and closed the latter, “I think we have finished for the
present. The further examination of these interesting trifles can be
postponed until to-morrow. Shall we go downstairs and talk over the
news?”
“It is getting rather late,” said I, “but there is time for a little chat,
though, as to news, they will have to come from you, for I have
nothing to tell.”
We went down to the sitting room where, when he had locked up
the box, we took each an armchair and filled our pipes.
“So you have no news of any kind?” said he.
“No; excepting that the Hilborough Square household has been
broken up and the inmates scattered into various flats.”
“Then the house is now empty?” said he, with an appearance of
some interest.
“Yes, and likely to remain so with this gruesome story attached to
it. I suppose I shall have to make a survey of the premises with a
view to having them put in repair.”
“When you do,” said he, “I should like to go with you and look
over the house.”
“But it is all dismantled. Everything has been cleared out. You will
find nothing there but empty rooms and a litter of discarded rubbish.”
“Never mind,” said he. “I have occasionally picked up some quite
useful information from empty rooms and discarded rubbish. Do you
know if the police have examined the house?”
“I believe not. At any rate, nothing has been said to me to that
effect.”
“So much the better,” said he. “Can we fix a time for our visit?”
“It can’t be to-morrow,” said I, “because I must see Barbara and
get the keys if she has them. Would the day after to-morrow do, after
lunch?”
“Perfectly,” he replied. “Come and lunch with me; and, by the
way, Mayfield, it would be best not to mention to any one that I am
coming with you, and I wouldn’t say anything about this parcel.”
I looked at him with sudden suspicion, recalling Wallingford’s
observations on the subject of mare’s nests. “But, my dear
Thorndyke!” I exclaimed, “you don’t surely associate that parcel with
any of the inmates of that house!”
“I don’t associate it with any particular person,” he replied. “I
know only what you know; that it was sent by some one to whom my
existence is, for some reason, undesirable, and whose personality is
to some extent indicated by the peculiarities of the thing itself.”
“What peculiarities do you mean?”
“Well,” he replied, “there is the nature and purpose of the thing. It
is an appliance for killing a human being. That purpose implies either
a very strong motive or a very light estimate of the value of human
life. Then, as we have said, the sender is fairly ingenious but yet
quite unmechanical and apparently unprovided with the common
tools which ordinary men possess and are more or less able to use.
You notice that the combination of ingenuity with non-possession of
tools is a rather unusual one.”
“How do you infer that the sender possessed no tools?”
“From the fact that none were used, and that such materials were
employed as required no tools, though these were not the most
suitable materials. For instance, common twine was used to pull the
trigger, though it is a bad material by reason of its tendency to
stretch. But it can be cut with a knife or a pair of scissors, whereas
wire, which was the really suitable material, requires cutting pliers to
divide it. Again, there were the corks. They were really not very safe,
for their weakness and their resiliency might have led to disaster in
the event of a specially heavy jerk in transit. A man who possessed
no more than a common keyhole saw, or a hand-saw and a chisel or
two, would have roughly shaped up one or two blocks of wood to fit
the pistol and jar, which would have made the thing perfectly secure.
If he had possessed a glue-pot, he would not have used seccotine.
But every one has waste corks, and they can be trimmed to shape
with an ordinary dinner-knife; and seccotine can be bought at any
stationer’s. But, to return to what we were saying. I had no special
precautions in my mind. I suggested that we should keep our own
counsel merely on the general principle that it is always best to keep
one’s own counsel. One may make a confidence to an entirely
suitable person; but who can say that that person may not, in his or
her turn, make a confidence? If we keep our knowledge strictly to
ourselves we know exactly how we stand, and that if there has been
any leakage, it had been from some other source. But I need not
platitudinize to an experienced and learned counsel.”
I grinned appreciatively at the neat finish; for “experienced
counsel” as I certainly was not, I was at least able to realize, with
secret approval, how adroitly Thorndyke had eluded my leading
question. And at that I left it, enquiring in my turn:
“I suppose nothing of interest has transpired since I have been
away?”
“Very little. There is one item of news, but that can hardly be said
to have ‘transpired’ unless you can associate the process of
transpiration with a suction-pump. Superintendent Miller took my
advice and applied the suctorial method to Wallingford with results of
which he possibly exaggerates the importance. He tells me—this is,
of course, in the strictest confidence—that under pressure,
Wallingford made a clean breast of the cocaine and morphine
business. He admitted that he had obtained those drugs fraudulently
by forging an order in Dimsdale’s name, written on Dimsdale’s
headed note-paper, to the wholesale druggists to deliver to bearer
the drugs mentioned. He had possessed himself of the note-paper at
the time when he was working at the account books in Dimsdale’s
surgery.”
“But how was it that Dimsdale did not notice what had happened
when the accounts were sent in?”
“No accounts were ever sent in. The druggists whom Wallingford
patronized were not those with whom Dimsdale had an account. The
order stated, in every case, that bearer would pay cash.”
“Quite an ingenious little plan of Wallingford’s,” I remarked. “It is
more than I should have given him credit for. And you say that Miller
attaches undue importance to this discovery. I am not surprised at
that. But why do you think he exaggerates its importance?”
Thorndyke regarded me with a quizzical smile. “Because,” he
answered, “Miller’s previous experiences have been repeated. There
has been another discovery. It has transpired that Miss Norris also
had dealings with a wholesale druggist. But in her case there was no
fraud or irregularity. The druggist with whom she dealt was the one
who used to supply her father with materia medica and to whom she
was well known.”
“Then, in that case, I suppose she had an account with him?”
“No, she did not. She also paid cash. Her purchases were only
occasional and on quite a small scale; too small to justify an
account.”
“Has she made any statement as to what she wanted the drugs
for?”
“She denies that she ever purchased drugs, in the usual sense,
that is substances having medicinal properties. Her purchases were,
according to her statement, confined to such pharmaceutical and
chemical materials as were required for purposes of instruction in
her classes. Which is perfectly plausible, for, as you know, academic
cookery is a rather different thing from the cookery of the kitchen.”
“Yes, I know that she had some materials in her cupboard that I
shouldn’t have associated with cookery and I should accept her
statement without hesitation. In fact, the discovery seems to me to
be of no significance at all.”
“Probably you are right,” said he; “but the point is that, in a legal
sense, it confuses the issues hopelessly. In her case, as in
Wallingford’s, materials have been purchased from a druggist, and,
as no record of those purchases has been kept, it is impossible to
say what those materials were. Probably they were harmless, but it
cannot be proved that they were. The effect is that the evidential
value of Wallingford’s admission is discounted by the fact that there
was another person who is known to have purchased materials
some of which may have been poisons.”
“Yes,” said I, “that is obvious enough. But doesn’t it strike you,
Thorndyke, that all this is just a lot of futile logic-chopping such as
you might hear at a debating club? I can’t take it seriously. You don’t
imagine that either of these two persons murdered Harold
Monkhouse, do you? I certainly don’t; and I can’t believe Miller
does.”
“It doesn’t matter very much what he believes, or, for that matter,
what any of us believe. ‘He discovers who proves.’ Up to the
present, none of us has proved anything, and my impression is that
Miller is becoming a little discouraged. He is a genius in following up
clues. But where there are no clues to follow up, the best of
detectives is rather stranded.”
“By the way,” said I, “did you pick up anything from my diary that
threw any light on the mystery?”
“Very little,” he replied; “in fact nothing that gets us any farther. I
was able to confirm our belief that Monkhouse’s attacks of severe
illness coincided with his wife’s absence from home. But that doesn’t
help us much. It merely indicates, as we had already observed, that
the poisoner was so placed that his or her activities could not be
carried on when the wife was at home. But I must compliment you on
your diary, Mayfield. It is quite a fascinating work; so much so that I
have been tempted to encroach a little on your kindness. The
narrative of the last three years was so interesting that it lured me on
to the antecedents that led up to them. It reads like a novel.”
“How much of it have you read?” I asked, my faint resentment
completely extinguished by his appreciation.
“Six volumes,” he replied, “including the one that I have just
borrowed. I began by reading the last three years for the purposes of
our inquiry, and then I ventured to go back another three years for
the interest of tracing the more remote causation of recent events. I
hope I have not presumed too much on the liberty that you were kind
enough to give me.”
“Not at all,” I replied, heartily. “I am only surprised that a man as
much occupied as you are should have been willing to waste your
time on the reading of what is, after all, but a trivial and diffuse
autobiography.”
“I have not wasted my time, Mayfield,” said he. “If it is true that
‘the proper study of mankind is man,’ how much more true is it of
that variety of mankind that wears the wig and gown and pleads in
Court. It seems to me that to lawyers like ourselves whose
professional lives are largely occupied with the study of motives of
human actions and with the actions themselves viewed in the light of
their antecedents and their consequences, nothing can be more
instructive than a full, consecutive diary in which, over a period of
years, events may be watched growing out of those that went before
and in their turn developing their consequences and elucidating the
motives of the actors. Such a diary is a synopsis of human life.”

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Food Security, Affordable Housing, and

Poverty: An Islamic Finance

Policy Innovations for Affordable Housing In Singapore

Pinch of Nom Budget : Affordable, Delicious Food 1st

Islamic Philanthropy: Exploring Zakat, Waqf, and

Disruptive Technology in Banking and Finance: An

China's Food Security: Strategies and Countermeasures

International Business and Security: Geostrategy in

PGPR Amelioration in Sustainable Agriculture: Food

Food security in the developing world 1st Edition

ISSN 2662-5121 ISSN 2662-513X (electronic)

There is a tendency in conventional economics and finance academia to

still at the top of the development agenda, regardless of many decades

Istanbul, Turkey Ahmet Suayb Gundogdu

1 Affordable Housing and Poverty 1

3 Food Security and Poverty 57

Contracts for Asset Development 160

Fig. 2.1 Resource mobilization/securitization and lending (Source

Fig. 4.8 Histogram for one-month sugar price change (Source

Table 1.1 Outcome and output table as-is case; conventional

Table 7.2 The role of government in Islam 177

Affordable Housing and Poverty

In Islam, paying Zakat, avoiding Riba, and spending to avoid hoarding

Case Box 1.1: The merit of Paying Zakat

1 Referring to Shurah At Touba, Ayah 34 for .

© The Author(s), under exclusive license to Springer Nature 1

The religion of Islam advises a delicate balance by encouraging prop-

2 Sunan an-Nasa’i 5485.

The sound understanding of Zakat is linked to a comprehensive

Case Box 1.2: Hoarding of Money

The problem of poverty, as conventionally defined, can supposedly be

3 Sahih Muslim, 1605.

estate prices leading to negative net worth? The conventional economics

Policy tool Output Outcome

Source The author

Policy tool Output Outcome

Source The author

The Role of Price Formation and Land Use Policy

. Location: a convenient house with access to public transportation,

The motivation of private entrepreneurship, which is acceptable and

C = Cash flow at the time (t ).

would turn into

i. Suppressing Periodic Payment (Pmt): limiting rent on housing.

Many verses in the Quran acknowledge the right of ownership of

. Discourage rent-seeking in society, making society more dynamic.

Ownership and inheritance rights are well acknowledged in the Quran as

The Role of Zakat

Case Box 1.3: Hadith on Zakat for Agriculture

and a twentieth on what is watered by camels (Sahih Muslim, 981).”

Case Box 1.4: Defining Hoarding Thresholds

by one. If there is no she-camel in her second year, a male camel will be

In essence, until the hoarding threshold, Zakat can be calculated based

on rent-seeking. This should not be done by targeting people’s owner-

Table 1.3 Discouraging hoarding of land

Residential Commercial Agricultural Industrial

Personal use No Zakat No Zakat No Zakat No Zakat

Source The author

economically unviable due to their scale. Zakat should not be calculated

level is crossed, Zakat should be implemented based on 2.5% of market