Living as a Service (LaaS)and How It’s Changing Property Ownership

Valmik Rao
6 min readApr 17, 2020

Before we talk about living as a service, just to give some context, here what’s up with house prices near me. Here’s a bit about Toronto’s housing crisis 👇

Residents in some parts of the GTA drop more than half their income on rent.

Turn back to last year, and these are the first returns on any search that has: a) Housing b) Toronto

Here are the main facts + effects:

  • Canada’s house prices have grown three times that of household income since 2000
  • Higher house prices reduce the standard of living and constrain economic growth
  • Restrictive land-use policies are associated with housing affordability losses.
  • Solving the middle-income housing affordability crisis will require policy reforms.

Moving to Toronto was expensive.

Toronto was a great example of other cities that have similar conditions, but because of situations like this. Property ownership is changing in big metropolitan cities like Toronto.

What’s Living as a Service?

Founded in 2008, one of the best examples of changing the housing industry, Airbnb raised 5.8 billion dollars of funding in total and was expected to IPO this year.

The service allows homeowners to temporarily rent out their property and get monetary benefits from it. It was a great way to make money if you had houses in areas of great demand, Airbnb would even pay for all the damage costs.

At its core, it’s living as a service, rather than owning the house. But we can apply this to many other aspects of home-owning like building equity as you pay rent.

LaaS allows people to slowly pay monthly/yearly rates to slowly earn their house rather than outright buying it.

How does this help the increasing prices in metropolitan cities?

“It takes an average of 21 years for the typical first-time Canadian urban home buyer just to save up for the recommended 20% down payment.”

Right now, the barrier to entry to these huge cities is incredible simply because of price, and by extension lowers the opportunities people have to move in. If we look at the main audience of people that are looking to move into cities, it would be single employees that want to reduce the amount of commute or unemployed people looking for jobs.

With LaaS, people can live in houses for a certain amount of time, and make agreements with private companies about paying significantly lower for a period of time rather than having to buy it out and deal with the hassle of selling. Certain agreements allow the owner to be able to transfer the money that was involved in the term payment as credit for outright purchasing.

Is anyone using this approach?

‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎‎ ‎ ‎ ‎‎ ‎ ‎ ‎‎‎‎‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎‎‎‎‎‎ ‎‎‎‎‎‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎‎‎‎‎‎ ‎‎‎‎‎‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎‎‎‎‎‎ ‎‎‎‎‎‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ ‎ Key Living

Key Living is a company that is focusing on agreements that help people looking to move to Toronto, build home equity through term payments. This helps them own their house for a period of time, and then after allowing them to use that same money towards ownership.

They are building a condo in the heart of downtown Toronto, that will help people that are looking to move to Toronto, but can’t afford the upfront payment and need time to build up their finances. For example👇

Steve is trying to move to Toronto in hopes of finding a new job, to support himself alone.

He has a little money, definitely not enough to pay outright for residence in the city.

He has enough money to live in Key Living’s condo for a period of 2 years, so he decides to buy a share.

Term payments and his building equity seem appealing to him, and after the 2 years he is financially stable and decides he wants to live there to be closer to his job.

He can take all the money he paid throughout those two years and apply it to his outright payment.

Increase in Workforce 📈

An increase in the workforce would be the biggest change that we can notice with these new financing models.

Creating fewer obstacles for people to live in Toronto while they work, will allow more people to move in to make life in their jobs easier. This doesn’t just apply to people that already have jobs in Toronto, but provides opportunities for people that are trying to find jobs in big cities. Here’s why proximity matters:

  • Between 2000 and 2012, the number of jobs within the typical commute distance for residents in a major metro area fell by 7 percent.
  • As employment suburbanized, the number of jobs near both the typical city and suburban residents fell.
  • As poor and minority residents shifted toward suburbs in the 2000s, their proximity to jobs fell more than for non-poor and white residents
  • Residents of high-poverty and majority-minority neighborhoods experienced particularly pronounced declines in job proximity.

These types of models have been applied to other assets like cars, but now are being applied to property ownership. Before we talk about implementing these models, we need cities to get on the wave 🌊

What do we need to change?

If this is so great, why isn’t this more widespread? Why don’t more people know about it? Why are you learning about it through a 16-year-old’s article?

Through a consulting project that I was doing for Sidewalk Labs, I learned about policies that might cause difficulties (I’ll expand on it later).

Here are some key policies/facts that we noticed throughout our housing industry analysis:

  • The number of rental apartments went down 25%, while condos went up 25% on in 2019
  • Rental rates for purpose-built rentals are up 16.1% annually, rising from $1,966 per month to $2,283 per month
  • There is a big demand for these types of models, as for the audience that we’re catering to (54% of people renting are aged 0–34) *
  • It’s also predicted that 300,000 renters in Toronto will be living in low income by 2031

Right now there is a big need for new models like these.

What I did with Sidewalk Labs

I proposed a solution that entails co-housing and the support of purpose-built rentals to build more buildings that can support people that are looking for work opportunities in the city.

Here’s what the recommendation was about:

  • Creating a platform that allows people that are looking to rent and co-house, the ability to find compatible partners that have similar schedules and priorities
  • Focusing their construction to classify as purpose-built rentals to allow lower rental rates for renters
  • Connecting to Toronto’s DLWC system for energy usage.

This is where my curiosity began for breaking down the housing industry, and where I realized that the amount of innovation in this field has become very limited. The main motivation for these recommendations came from the absence of all these features today, there is a huge clash when it comes to co-housing and people’s feelings toward it because there is simply a lack of information on it, increasing the barrier of entry.

I hoped you learned from my breakdown of the industry and what we need to do to help support new models coming.

Don’t hesitate to reach out for any questions at 👋



Valmik Rao

Just a 16-year-old trying to solve the world’s biggest problems…