Latest / Logosofia no Dia a Dia / The Hidden Billions of Rental Churn
Transcript
- [Prompt] custom: We've talked in many episodes about the housing crisis and the crazy state of the rental market here | Hosts: corn, herman [Response] Corn: Somewhere in Jerusalem this week, a one-year-old had his first birthday. And instead of cake and wrapping paper and a single candle, he spent the day surrounded by cardboard boxes and packing tape. His parents were moving — not because they wanted to, not for a new job or a better school district, but because the lease ended and the landlord decided not to renew. So Daniel sent us this question: what's the actual cost of that? Not the emotional cost — though that's real — but the number. The line item in a society's balance sheet that nobody is tracking. Herman: It's a genuinely strange thing when you stop and look at it. We have an entire housing policy discourse — in Israel, in the US, across a lot of deregulated markets — that talks endlessly about rent levels and supply and zoning and mortgage rates. And somehow, almost nobody has sat down and said: wait, what does it cost, in cold hard currency, to force millions of households to pack up their lives every two or three years? Corn: That's the question Daniel's asking. He's clocked six moves in ten years here in Israel — the last two completely involuntary, one because a landlord wouldn't fix a leak, another because the owner handed the apartment to a family member. And he looked at the receipts and realized the per-move cost is catastrophic. We're not talking about an inconvenience. We're talking about ten thousand shekels in direct moving expenses, another month's rent to an agent — which is technically illegal in Israel but de facto required — and somewhere between forty and sixty hours of human time. Viewing apartments, packing, moving day, unboxing, changing addresses, setting up utilities. All of it time not spent on work, on family, on anything that builds rather than just maintains. Herman: Here's the thing that grabbed me when I read Daniel's prompt. He said — and I'm paraphrasing — "a significant amount of my life from age twenty-five to thirty-five has been taken up by simply obtaining continuity of housing." That's not a complaint about rent being too high. That's a description of a structural mechanism that is quietly consuming human potential at scale. Corn: That's what we're going to do today. We're going to try something that, as far as we can tell, nobody has done in the public discourse. We're going to build a cost model. What does one move actually cost — every shekel, every hour — and what happens when you multiply that across a lifetime, and then across an entire country of renters? Herman: I want to be clear upfront — this isn't just an Israel story. The mechanism we're talking about is tenancy-at-will. It's the default in Israel, but it's also the default in Texas and Florida and Arizona and a whole lot of other places. The landlord has no obligation to renew your lease, and you have no right to stay. That structural uncertainty is what drives the churn. Corn: By the end of this episode, we're going to have a number. A rough one — we're not the Central Bureau of Statistics — but a defensible estimate of what rental musical chairs costs society every year. And then we're going to ask the obvious follow-up: if the number is as big as we think it is, why is it completely absent from the housing debate? Herman: Let's unpack the mechanism itself, because the word "tenancy-at-will" sounds almost benign — like, sure, both parties can walk away. But in practice, it's not symmetrical. The landlord can end the arrangement for almost any reason, and the tenant's only option is to pack. In Israel, the standard lease is twelve months, and after that, the landlord can simply say "I'm not renewing." No cause required. No notice period beyond the lease end date. Corn: That's what makes it structural rather than personal. Daniel's six moves in ten years — that's not bad luck. That's the system functioning exactly as designed. The average tenancy in Israel runs about two to three years before a move, whether voluntary or not. You're not supposed to stay. Herman: And this isn't some quirk of Israeli law. Look at Texas — a landlord can terminate a month-to-month tenancy with thirty days' notice, no reason needed. Florida, same deal. These are massive rental markets, millions of households, all operating on the same underlying logic: the tenant's right to remain is contingent on the landlord's willingness to renew, and that willingness can evaporate for any reason — they want to sell, they want to raise the rent beyond what you can pay, they have a nephew who needs a place. Corn: The mechanism isn't "landlords are bad." It's that the default legal framework creates a perpetual instability that has nothing to do with whether you're a good tenant. You can pay on time, never complain, treat the place like a museum, and you're still one lease cycle away from a forced move. Herman: Here's what's strange. The housing policy debate in all these places has been laser-focused on two things: rent levels and supply. Build more units. Cap rent increases. Those are the levers everyone argues about. And they matter — I'm not saying they don't. But they completely miss a third cost that's hiding in plain sight. Even if your rent stayed flat for a decade, if you're forced to move four times in those ten years, you're still bleeding money and time in a way that no rent control addresses. Corn: That's the deadweight loss. It's the economic term for value that's destroyed without creating any offsetting benefit. The truck, the boxes, the agent fee, the forty hours of packing — none of that produces anything. It's just friction. Pure overhead that exists only because the system is structured to churn tenants. Herman: I think the reason this cost has been invisible in the discourse is that it's distributed. It shows up as five thousand shekels here, a lost weekend there, a security deposit that takes two months to come back. Nobody sees the aggregate. A rent increase makes headlines — "average rent in Tel Aviv crosses six thousand shekels" — that's a clean number. But the churn cost is scattered across millions of individual ledgers, and nobody's ever added them up. Corn: That's what we're about to do. Herman: Alright, let's start with a real move. Tel Aviv, four-room apartment, two adults, one toddler. Not a hypothetical — this is the kind of move Daniel's describing, and it's what a huge chunk of Israeli renters face. Truck plus three movers for a day: about forty-five hundred shekels. Corn: That's if you're not moving during August, when every student in the country is competing for the same three guys with a van. Herman: August adds a premium, but let's use the baseline. Packing supplies — boxes, tape, bubble wrap, the works — roughly twelve hundred shekels. You're not buying premium, you're just buying enough cardboard to encase your life. Corn: The bubble wrap alone is a small industry. I've seen it. Herman: Cleaning the old apartment — because if you don't, the landlord deducts it from your deposit and at a rate far higher than what a cleaner actually costs — about eight hundred shekels. Then painting the new place. Most Israeli leases require the tenant to paint before moving out, and the incoming tenant often ends up painting again because the previous job was slapdash. That's another twenty-five hundred. Corn: Before we even get to the big-ticket items, we're at nine thousand shekels. And we haven't paid the agent yet. Herman: The agent fee. This is the one that makes people's eyes water. Technically, under Israeli law, the party who hires the agent pays the fee. In practice, the agent lists the apartment, you want the apartment, and if you don't pay the fee — typically one month's rent — someone else will. Average rent in the Tel Aviv metro is around fifty-five hundred shekels. So there's another fifty-five hundred, straight out of pocket, for a service that in any functional market would be paid by the landlord who's actually the agent's client. Corn: It's not like you can skip the agent. The good apartments never hit the open market. You pay or you don't see them. Herman: Then there's the security deposit float. Israeli landlords typically demand two to three months' rent as a deposit. So you're handing over somewhere between eleven thousand and sixteen thousand shekels, which they hold for six to eight weeks after you move out. While that money sits in someone else's bank account, it's not earning interest for you. Conservatively, that's about eighteen hundred shekels in lost opportunity cost. Corn: Add it up. Truck and movers forty-five hundred, supplies twelve hundred, cleaning eight hundred, painting twenty-five hundred, agent fee fifty-five hundred, deposit float eighteen hundred. We're at sixteen thousand three hundred shekels. For one move. That's not a catastrophe anecdote — that's the line-item reality. Herman: We haven't touched the time cost. Daniel mentioned forty to sixty hours per move, and that tracks. Viewing eight to twelve apartments — each one an evening gone, often with a toddler in tow. The move day itself, which is a twelve-hour endurance event. Unboxing over the following week. Changing addresses with the post office, the bank, the health fund, the utilities. Setting up internet. Arguing with the internet company. That's easily fifty-two hours spread across three weeks. Corn: Value that time at the average Israeli wage — about sixty shekels an hour — and you're looking at another three thousand shekels in lost time. Add that to the direct costs and one forced relocation clocks in somewhere between eighteen and twenty-one thousand shekels. Herman: If a renter moves every two and a half years over a forty-year renting career, that's sixteen moves. At twenty thousand shekels a pop, you've burned three hundred twenty thousand shekels on churn. That's roughly a down payment on a small apartment. You spent a down payment just to keep having a place to live. Corn: That's the individual math. Here's the societal one. Israel has about two and a half million renter households. Not all of them move every two and a half years, but if even half of them do — at a cost of roughly twenty thousand per move — the annual churn cost to Israeli society is somewhere between eight and ten billion shekels a year. Herman: Let that number sit for a second. Eight to ten billion shekels. That's comparable to the annual budget of a mid-sized government ministry. The Ministry of Health's entire budget is about forty-five billion. The Education Ministry is around sixty. We're talking about a sum that, if it were a line item in the national budget, would be front-page news every year. Corn: This is only the direct stuff. The truck, the boxes, the agent, the time. It doesn't include the therapist you don't see because you're too busy arguing with the movers. It doesn't include the work project you half-deliver because you're apartment-hunting on your lunch break. It doesn't include the kid who changes schools mid-year because the only available apartment is in a different district. Herman: Pure deadweight loss. Eight to ten billion shekels a year, and it produces exactly nothing. No new housing. No improved infrastructure. Herman: The direct costs are only the beginning. There's a deeper loss that doesn't show up on any receipt. Think about what happens to someone's work life when they're moving every two years. You finally get a home office set up — desk positioned near the window, good light for video calls, the router in the right spot — and then you're in a new apartment where the only place for a desk is the corner of the living room next to the toddler's toy bin. Corn: The number of Zoom calls I've seen people take from a kitchen table with boxes in the background. It's the unofficial backdrop of the Israeli renter. Herman: That's not just an aesthetic problem. It's a productivity tax. You lose the ergonomic setup, the second monitor, the quiet room with a door that closes. Every move resets your work environment to zero, and it takes months to rebuild — if you even bother, knowing you might be out again in eighteen months. Corn: Then there's the commute math. You choose an apartment partly based on proximity to work, to the kid's daycare, to the one relative who helps with babysitting. A forced move scrambles all of that. Suddenly you're adding forty minutes each way, or you're on a different bus line that doesn't run late, or the daycare pickup window becomes impossible. Herman: For children, it's even more acute. Changing schools mid-stream — new teachers, new curriculum pacing, new social dynamics to navigate. There's a body of research on this. Residential instability in childhood correlates with lower educational attainment, not because the kids are less capable, but because the disruption itself imposes a cognitive load. Every move is a reset button on a kid's sense of stability. Corn: We've got productivity loss, career friction, educational drag. But I think there's something even harder to quantify, and it's what I keep coming back to in Daniel's prompt. He mentioned never feeling like he has a rooted place of home. That's not poetry — it's an economic concept that nobody's named yet. Herman: Let's name it. Call it rootedness capital. It's the accumulated local knowledge that makes daily life efficient and, frankly, livable. You know which grocery store has the fresh pita and which one sells produce that's already turning. You know a plumber who answers the phone and doesn't overcharge. You know the neighbor who'll accept a package. You know the walking route that gets you to the park in seven minutes instead of twelve. None of this shows up in GDP, but all of it is real economic value. Corn: Every move zeroes it out. You arrive in a new neighborhood and you're starting from scratch. You don't know anyone, you don't know where anything is, you're burning time and mental energy just re-establishing the baseline that the stable resident takes for granted. That's capital destruction. It's just not the kind that appears on a balance sheet. Herman: This is where the standard economist's counterargument usually enters. Some will say — and I've heard this — that rental flexibility is actually efficient. It enables labor mobility. People can move for better jobs without being tied to a mortgage or a long lease. And there's truth in that. The optimal level of mobility is not zero. Corn: But the system we have isn't producing optimal mobility. It's producing churn. There was a study from the Joint Center for Housing Studies at Harvard — this was twenty twenty-two — that found thirty-seven percent of renters who moved in the prior year did so involuntarily. Eviction, foreclosure, or landlord non-renewal. That's not people chasing better jobs. That's people being pushed. Herman: That's the US data. I'd wager the Israeli number is comparable, if not higher, given how tenancy-at-will operates here with even fewer protections. The efficient mobility argument applies to at most a third of moves — the people relocating for career reasons. The rest is just forced musical chairs. Corn: Here's the policy implication that falls out of this. If we could reduce involuntary moves by half — just half — the societal savings in Israel alone would be four to five billion shekels a year. That's not a cost to be borne. That's a productivity dividend waiting to be claimed. Herman: Let's make that concrete. Take two renters over a decade. One stays in the same apartment the whole time — one move, at the start. The other gets bounced four times. The stable renter saves roughly sixty thousand shekels in direct costs and about fifteen hundred hours of time. That's fifteen hundred hours that went into career advancement, or learning a skill, or coaching a kid's football team, or just being present at dinner without a phone in one hand searching Yad2 for listings. Corn: Fifteen hundred hours. That's nine months of full-time work. Imagine what you'd do with an extra nine months of your life back over a decade. That's the human potential we're burning, and it's not because of some unavoidable force of nature. It's a policy choice. Or more precisely, it's the consequence of not making a policy choice — of letting tenancy-at-will be the default and calling it a market. Herman: If the cost is this high, what do we do about it? Three concrete levers. First, for policymakers: the single highest-leverage reform is a lease-renewal guarantee. Not rent control — we're not capping what landlords can charge. The policy is simply this: a tenant who has fulfilled their lease obligations has the right to renew, unless the landlord can demonstrate a specific, verifiable reason for non-renewal. Corn: Owner move-in, major renovation, sale of the property. Those are legitimate. "I feel like it" is not. Herman: And the burden of proof shifts to the landlord. You want to end the tenancy? This is how it works in Germany, in Switzerland, in a number of jurisdictions where renting is a stable, long-term proposition rather than a temporary condition. It doesn't destroy the rental market — it just removes the arbitrary non-renewal that drives most involuntary churn. Corn: The beauty of it is, it doesn't require a single shekel of government spending. It's a legal rebalancing. The default flips from "you're out unless the landlord wants you to stay" to "you're in unless the landlord has a real reason for you to go. Herman: Second lever, this one for renters themselves: calculate your own churn tax. Use the model we just walked through — direct costs plus time valued at your wage — and add up what you've spent on moves over the past five or ten years. Most people have never done this. The number sits in scattered receipts and half-remembered weekends. But once you see it as a single figure — three hundred thousand shekels over a career, or whatever your number is — it changes how you think about housing policy. Corn: It also changes how you advocate. When you're in a conversation about the rental market and someone says "well, moving is just part of renting," you can say: "It's cost me eighty thousand shekels in the last five years. That's not a lifestyle choice, that's a tax. Herman: That brings us to the third lever — the rhetorical one. The next time someone argues that rental markets are efficient, ask them to include the eight to ten billion shekels of annual churn cost in their model. Because right now, the efficiency argument gets to ignore the single largest line item. It's like claiming a factory is profitable while leaving the cost of raw materials off the books. Corn: The burden of proof should shift. The question shouldn't be "prove that the current churn level is harmful." It should be "prove that the current churn level is optimal." Because we've just shown that even a fifty percent reduction in involuntary moves would unlock four to five billion shekels a year in Israel alone. If someone wants to defend the status quo, they need to explain what we're getting for that money. Herman: I suspect the answer is: nothing. We're getting friction without function. Corn: Let's go back to where we started. That first birthday. Boxes instead of cake. Packing tape instead of wrapping paper. Daniel's son won't remember it — he's one — but Daniel will. And the thing is, that image isn't a personal sob story. It's a microcosm of a structural problem that costs eight to ten billion shekels a year and quietly steals years of people's lives. The birthday is just the most photogenic version of the loss. Herman: I think that's what I want to leave people with. Not the eight to ten billion — though that number should be in every housing policy document from now on — but the question of what we're actually losing. Fifteen hundred hours over a decade. Sixty thousand shekels. That's not an abstraction. That's a second degree you didn't earn, a business you didn't start, a language you didn't learn, a thousand bedtime stories you didn't read because you were on Yad2 looking for the next apartment. Corn: Here's the open question. Not rhetorical — we actually want people to sit with this. What would you do with the fifteen hundred hours and sixty thousand shekels you'd save over a decade of stable housing? Because that's the human potential we're currently burning. And it's not being burned by accident. It's being burned by a legal default that nobody voted on and nobody defends in public but that structures the lives of millions of renters every single day. Herman: On that note — we want your numbers. If you've tracked your own moving costs, wherever you live, send them in. Israel, the US, Germany, wherever. Direct costs, time estimates, how many moves, how many were involuntary. We're going to build a global churn-cost index. The more data points we get, the harder this is to ignore. Corn: Email the show at show at my weird prompts dot com. Tell us what you've spent, in money and in hours, just to keep a roof over your head. Herman: Now: Hilbert's daily fun fact. Hilbert: In the first century CE, the Itelmen people of the Kamchatka Peninsula believed that axolotls could regenerate not only limbs but entire personalities — that an axolotl dropped into a new pond would slowly adopt the behavioral quirks of the local salamander population, effectively becoming a different individual while remaining the same animal. Corn: An amphibian identity thief. Herman: This has been My Weird Prompts. Our producer is Hilbert Flumingtop. If you want more episodes, find us at my weird prompts dot com or wherever you get your podcasts. And if you got something out of this one, tell someone who's moved recently. They'll understand.