By Meghan Hall
The real estate sector is filled with careful decisions based on a wide variety of factors, and in some cases, intuition regarding the market. However, real estate professionals are using new technology more than ever to help in the decision-making process to mitigate risk. Local Logic, an intelligence platform, seeks to change the way those in real estate make decisions and usher in a new era of place making based heavily on data. The Registry spoke with Local Logic’s Founder and CEO Vincent-Charles Hodder on how location intelligence can change the industry.
Please tell The Registry a little bit about Local Logic. When and where did the idea to create a platform that analyzed an entire neighborhood first arise?
In our hearts, we, at Local Logic, are urban planners turned data scientists. We are passionate about the future of our cities, and we use the power of location intelligence to make them work better for the people that live in them. The idea began while I was getting a Master’s degree in urban planning alongside our other founders, Gabriel Damant-Sirois and Colin Stewart. The three of us got together and discussed the fact that there is a ton of data on cities that’s not being used in the planning and development process.
As a citizen, one of the biggest impacts you can have on the long-term sustainability of cities is the way you choose your home and your lifestyle you have. We wanted to create a product that allowed consumers to access that data and have it guide their own decisions. What we’ve done to further that goal is to access billions of data points to inform 17 unique scores that measure things like noise levels, vibrancy, traffic, transit access and quality of schools. Those essentially provide a digital representation of a city and what it’s like to live there, which empowers a wide range of decisions across the full spectrum of real estate – from homebuyers and agents to developers and planners.
Why do you believe this type of location intelligence is important to the industry?
Real estate is a bit of a funny industry, in that it involves a tremendous amount of money being invested on mostly gut feeling and intuition. Traditionally, you have a developer or planner who has a hunch about a neighborhood and where it’s going, and that represents the bulk of how hundreds of millions of dollars are spent. The same is often true when it comes to homeownership – most buyers are making an incredibly important decision despite not having access to the data to decide whether this is the right financial decision. By infusing more data and location-specific insights into these processes, as well as traditional urban planning, we can create more actionable insights that drive better decisions and eventually cities that are better able to serve the people who live in them.
Local Logic pitches that it allows for a new type of placemaking. Prior to its launch, what did place making look like to you, and how is place making evolving as a result of Local Logic?
Traditionally, placemaking is thought of largely as the design process behind a broad cross-section of the built environment – usually incorporating both private buildings and public gathering places. However, it can also be used to refer to the more conceptual aspects of urban planning, during which stakeholders imagine the mix of uses, amenities, density levels and other characteristics that make a neighborhood unique.
In the past, this was really being done by a loose collection of private developers or city officials, each of whom is essentially selling their own idea of what a community should be. Efforts are sometimes made to have the public participate in this process, but it often leaves them in a reactive position, in which they share their thoughts on a specific proposal or plan that is already fully baked.
What Local Logic enables is the inverse of that system, which allows the people who live in a given city the ability to decide what should be built and invested in. By providing an accurate depiction of what is in demand, our platform allows the market to respond to their needs. In turn, cities can benefit from a more optimized, democratic version of placemaking in which residents have the power to shape the environment where they live and spend their time.
As an example to readers, what are some of the insights that Local Logic can provide to users?
As I mentioned, we are able to collect precise data and assign scores to quantify external location insights such as noise, vibrancy, transit access, bike-friendliness, green spaces and other factors. But perhaps more powerful is that we can not only characterize a location as it currently exists, we’re also able to extract insights into how cities are evolving over time.
That can be incredibly valuable in guiding decision-makers about where or what kinds of assets they’re investing in. Through our insights, our users can gain an understanding of what is currently being valued by consumers, which is the most powerful market driver. Those indicators allow them to understand and measure trends over time, get a good sense of what a location or a neighborhood will look like 2-3 years from now, and make confident decisions about how to maximize their assets.
Has there been a sector or asset type that has been particularly popular with Local Logic? Why or why not?
Our ability to accurately measure consumer demand gives us a deep knowledge in the residential and mixed-use sector. However, we also have an understanding of the demand for specific retail assets, as many prospective homebuyers or apartment hunters use our platform to search for nearby coffee shops, restaurants, nightlife destinations and other retail-based amenities.
Can you explain—from a more technological perspective—how the platform works and how it generates its insights?
There are two issues we’re trying to solve with our data and insights. Right now, sophisticated investors and developers are accessing data but it’s an extremely painstaking process. For example, just gathering demographic information for a single location can often take hours. In order to solve for that pain point, we gather and clean data from a wide variety of public and private sources, and then make it accessible in a centralized, easy-to-navigate platform. To supplement that, we also collect anonymized data on consumer behavior when prospective homeowners or apartment hunters use our real estate portal and those of our affiliated partners. By tracking what aspects of a location are interesting to consumers, we can provide our users with a proxy for what is in demand.
Local Logic has recently raised $8 million in Series A funding. How does the company plan to deploy this capital moving forward to support its growth?
We are essentially doubling down on our existing model. We’ll be working on getting more data points in more geographies across North America and building out our predictive engine to provide more complex and actionable insights, as well as refining the finish and improving the usability of our product. We’ll need to double our existing staff in order to accomplish all of that, so we’ll also be leveraging the new funding to do a lot of hiring.
Looking ahead, how do you see real estate decisions evolving as technologies such as Local Logic continue to grow and become more prevalent in the marketplace? Why?
Real estate companies such as developers and investors have always looked to control risk, but it’s taken on outsized importance in the wake of the pandemic. That’s going to be a lot easier as more data becomes available and transparency around that data improves. Being able to not just measure current demand in the market, but also predict how that demand will evolve, will increasingly inform development decisions that have immense consequences for cities and the communities that call those cities home. A bad decision in that area – such as a massive infrastructure investment like a highway – is not a temporary mistake. Those structures are likely to remain in place for decades if not centuries, and as a result can set the course for entire neighborhoods and cities — and, consequently, generations of families. That has enormous effects not just economically, but on the overall satisfaction and quality of life in a given location. As more and more players in both the private and public sector continue to recognize the power of this data and predictive insights, you will see these technologies take on a much larger role in the traditional development and investment process.
Is there anything you would like to add, or anything we should be asking?
The Local Logic platform is really a byproduct of our mission and our core values. We believe that data and technology are critical to our ability to not just make cities better, but to create more equitable places to live. Technology today allows us to develop based not only on the intuition or preferences of developers or public officials, but to effectively respond to the needs and desires of all people. This holds tremendous potential not just to create more accuracy and efficiency in the investment and development process, but to change the way our cities are planned, built and experienced.