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Why are there suddenly so many car washes?

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Re: Why are there suddenly so many car washes?

#351

Post by lmm »

dinp wrote: post #340
KingMachiavelli wrote: post #181

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

> I don't understand the argument of designing a system to hurt a specific business type such as low value businesses.

The argument is that good business spots are a limited community resource that it makes sense to tax, like radio spectrum. If you can make good use of the space you're taking up, go ahead, but you should compete fairly with other uses of the space. If anything taxing space use makes more sense than taxing profits; a profitable business is probably one that's serving the community well, whereas a business that takes up space and doesn't generate much profit is no good for anyone. From the article:

> “A car wash does not provide a lot of jobs for the community, and they take up a lot of space,” Broska said. “If you want to invest your dollars into a car wash, then God bless you. But at the same time, I’m responsible for 17,500 people and have to be cognizant of their wishes.”

> the largely automated facility wasn’t the best use for a prominent Main Street site

Re: Why are there suddenly so many car washes?

#352

Post by nunez »

bdcravens wrote: post #112
bee_rider wrote: post #83

1) Who is spending $20 a month on car washes? 2) If the problem is that subscription users aren’t paying local sales taxes, why not charge property taxes? (or, Land Value Tax!)

I used to wash my car every few weeks, but with an unlimited model, I now wash it every few days. It literally takes 2 minutes to pull in and through the car wash.

this will ruin your paint over time

Re: Why are there suddenly so many car washes?

#353

Post by BenFranklin100 »

lmm wrote: post #351
dinp wrote: post #340

Earlier quoted context omitted.

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

> I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. The argument is that good business spots are a limited community resource that it makes sense to tax, like radio spectrum. If you can make good use of the space you're taking up, go ahead, but you should compete fairly with other uses of the space. If anything taxing space use makes more sense than t…

To add to this, LVTs encourage more homes near job rich areas of the city. This in turn means more people can live nearby and have a shot at a job.

Re: Why are there suddenly so many car washes?

#354

Post by zeroonetwothree »

I don't understand why we can't just let the market decide which businesses make sense based on their revenue vs. leasing the land. Presumably if car washes are so profitable it's because consumers want to use them, so why are we artificially restricting their expansion? It also provides a free subsidy to existing car washes who get to charge higher prices than they would in a competitive market. Restrictions to entering trade generally hurt consumers.

FWIW, I've used a paid car wash <10x in my life so it doesn't matter that much to me.

Re: Why are there suddenly so many car washes?

#355

Post by zeroonetwothree »

atrus wrote: post #168
logifail wrote: post #89

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

> If the market were too small, the weakest would fail, right? Right? I find it interesting that we have sayings like this, and sayings like "the market can stay irrational longer than you can stay solvent." > why should a politician need to step in to regulate, rather than letting the market decide? Because the market doesn't price in externalities. Sure the market will figure out which car washes live. But what abo…

> > If the market were too small, the weakest would fail, right? Right? > I find it interesting that we have sayings like this, and sayings like "the market can stay irrational longer than you can stay solvent."

To be fair "market" is referring to two different things in those two sentences. Different markets can have different characteristics.

Re: Why are there suddenly so many car washes?

#356

Post by KingMachiavelli »

dinp wrote: post #340
KingMachiavelli wrote: post #181

I really hate sounding like a broken record but this is just another instance of how low property taxes and the absence of land value taxes massively benefits low-value businesses. The real business of car washes is real estate, it's profitable enough to get 3-4x leverage with a low interest loan. TBH I think real estate used to have high information asymmetry between local residents and large investors; low property…

Somehow the idea of perpetually paying property taxes and land value taxes doesn't sound appealing to me, especially since businesses already pay taxes. I don't understand the argument of designing a system to hurt a specific business type such as low value businesses. If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even. If desirable high value businesses ar…

The theory of (LVT) land value tax is that it replaces other taxes. LVT has less or no dead weight loss so it's a more efficient tax.

> If there's a loophole such as lack of sales tax for car washes, fix that, but let the playing field remain even.

My claim is that the playing field is not currently even rather it is massively in favor for low-capital, low-labor, and low-regulatory businesses (like car washes) and additionally incentives ostensibly designed to encourage real estate development (1031 like-kind, treatment of real estate as depreciating, etc.) are now primarily used to either speculate on existing real estate or build the minimum to gain ownership/interest in speculation. If you take all the cash you have, you can only buy a finite amount of land. If you build a low-capital but profitable business like a car wash, you are only limited by the leverage limits imposed by lenders.

> If desirable high value businesses aren't able to compete with car washes, isn't that the market doing it's thing? > but what are the 2nd and 3rd order effects of such a change?

Tautology yes, as desired no. Technically yes because the market is shifting towards low-capital and low-regulatory businesses because they have a more predictable ROI. The goal isn't to disfavor the more capital & regular intensive businesses just regulate them. i.e the influx of car washes is the undesired 2nd order effect of some other policy e.g. minimum parking for restaurants and apartments (likely no such rule exists for car washes so now you need less land a car wash vs a restaurant).

Raising regular property taxes (land+improvements) is just easier solution than waiting for far-reaching tax reform like LVT. IMO it's better to correct the market even if it means raising taxes overall in the short term.

Re: Why are there suddenly so many car washes?

#357

Post by zeroonetwothree »

mschuster91 wrote: post #321
throwaway22032 wrote: post #219

Earlier quoted context omitted.

Indeed. More than 36% of Americans are clinically obese. There are a _lot_ of really short sighted people out there.

That's due to poverty... calorie dense, highly processed food is cheap as hell due to mass production efficiencies, but high quality food? Groceries? Ain't no one got the money for that, or they live in "food deserts" [1]. For poor kids, it's even worse, because all they have other than sub-par school lunches is whatever microwave meal their parents can afford not just financially but also time-wise. Cooking for a fa…

Many people are obese despite not living in poverty (including myself, unfortunately).

Re: Why are there suddenly so many car washes?

#358

Post by zeroonetwothree »

TylerE wrote: post #212
logifail wrote: post #89

> There are four full-service car washes in town, with a fifth on the way; three are bunched up on a mile-and-a-half stretch of Route 14. Social media complaints about car wash overkill spurred town leaders to take action. Four (or even five) doesn't sound that much? What's the actual problem here? How is a local politican supposed to determine what is the correct density of any particular type of service within her…

If it’s anything like the 3 that have opened in my town of 80k in literally the last year it’s because they’re huuuuuuge. The wash itself is 100+ft long, and tons of parking, vacuums, etc. Just one of those things takes up the space of 3 or 4 normal gas stations. The crazy thing is that after a small wave of initial enthusiasm, they hardly ever even have customers.

If they don't have customers wouldn't we expect them to shut down at some point?

Re: Why are there suddenly so many car washes?

#359

Post by carbocation »

Turing_Machine wrote: post #289
mdasen wrote: post #233

Earlier quoted context omitted.

Land value taxes aren't about destroying natural land to extract value. The point of taxing the value of the land in urban areas is that a lot of the time places essentially squat on land that could be better used. A car wash building will have a low assessed value for its improvements compared to a biotech building. For example, in my city we have a carwash with its improvements valued at $400,000 and a biotech buil…

> For example, in my city we have a carwash with its improvements valued at $400,000 and a biotech building with its improvements valued at $275,000,000. That's well and good, but, you know, people still want to wash their cars, and probably don't feel like driving 30 miles out of town to do it.

The pro-land value tax response is that, if someone really believed people highly valued washing their cars in the city, one could open up a car wash on expensive land. If people really don't want to drive 30 minutes but also really want to wash their car, they can pay more to use this expensive in-town car wash. It is of course possible that the economics wouldn't make sense to support such a use of urban land in the densest/highest value areas.

Re: Why are there suddenly so many car washes?

#360

Post by GeneralMayhem »

_heimdall wrote: post #335
hn_throwaway_99 wrote: post #326

Earlier quoted context omitted.

To be honest, I think you have it exactly backwards, and a land value tax isn't about taxing "raw land" (that is, land with no improvements), it's about taxing the value of the land without regard to improvements. See https://en.wikipedia.org/wiki/Land_value_tax and https://en.wikipedia.org/wiki/Georgism

Would the land go untaxed until there are improvements? If not, the raw land value itself is being taxed.

No. The land would be taxed whether it has improvements or not, and in fact would be taxed the same amount whether improved or not. That's how such a tax incentivizes improvement - if you're paying the tax either way, you want to do as much as possible with it to get your money's worth.
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