Why are there suddenly so many car washes? • Hacker News Board

Re: Why are there suddenly so many car washes?

#461

Post by derbOac » Mon, Mar 18, 2024, 1:47 PM UTC

speakfreely wrote: post #336

The answer is private equity "roll-up" strategies of "boring businesses". You're going to see this accelerate in tons of other things that PE thinks can be easily consolidated, the gold rush has already started for dental practices, primary care providers, coin laundry, HVAC companies, landscaping, etc. American small businesses are disappearing because that's what consumers want (what they vote for with their dollar…

I don't think it's necessarily what consumers want. Sometimes it's what business owners want (eg when they retire and sell), and consolidation gives the new owner the benefit of local monopoly or decreased competiton.

Absolutely no one in my area likes trends in veterinary care, for example, but there are only so many options.

Re: Why are there suddenly so many car washes?

#462

Post by ufocia » Mon, Mar 18, 2024, 1:47 PM UTC

j-a-a-p wrote: post #415

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…

> for a depreciating asset. I don't see a correlatiopn between depreciation and the cleaning of the asset. My body for example started to depreciate after it was appr. 30 years old, but I still wash it every day. I think cleaning is an operational expense that does not support the lifespan of the object, it merely maintains an experience threshold. And about experience, I also never washed my car until I got kids: ca…

Lifespan is a factor in depreciation, not the other way around, although many people believe it is, i.e. depreciated equipment may still have usefulness though some people (businesses) rush to replace equipment once it's depreciated.

In case of real estate, depreciation offers income tax deferral because real estate retains much of its value and sometimes even appreciates despite being fully depreciated. It may be a part of or analogous to the borrow and die scheme of tax avoidance.

Re: Why are there suddenly so many car washes?

#463

Post by ufocia » Mon, Mar 18, 2024, 1:51 PM UTC

mindslight wrote: post #377

onionisafruit wrote: post #341

Earlier quoted context omitted.

Land value tax is turning out to be this year’s universal basic income.

When the wish for a positive solution doesn't pan out, people turn to the spiteful negative. Turn up the pain on others, that will solve things. Never mind that many real estate tax regimes already include a component based on the land value. Presumably to LVT enthusiasts those just aren't high enough. When the right level of pain has created the perfect incentives, wasteful duplexes will vanish and high density arco…

Not just bankers. REITs also don't invest in groundbreaking endeavors, or do they?

Re: Why are there suddenly so many car washes?

#464

Post by milanhbs » Mon, Mar 18, 2024, 1:55 PM UTC

hermitcrab wrote: post #442

johnwalkr wrote: post #43

Earlier quoted context omitted.

I think generally it should not be allowed. A big component of soap is phosphates, which promote algae growth so you really don't want it in your rivers. Some cities have combined or separated sewer systems. Even if combined, it may be designed to overflow during heavy rain, so it's not a guarantee that car wash water with dirt, soap and oil will not go into into a stream somewhere although in that case you're also s…

>I think generally it should not be allowed. A big component of soap is phosphates, which promote algae growth so you really don't want it in your rivers. Shouldn't we ban people showering under the same logic? I use about the same amount of soap to wash my car as I do in the shower, but I shower a lot more often.

Your driveway drains to a nearby body of water, most likely, while your bathroom trains into sewage which is treated.

Re: Why are there suddenly so many car washes?

#465

Post by ufocia » Mon, Mar 18, 2024, 1:56 PM UTC

chongli wrote: post #367

_heimdall wrote: post #335

Earlier quoted context omitted.

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

The value of the land is not solely based on the "raw land." As they say in real estate, it's all about location, location, location! A half-acre beachfront plot in Malibu is worth orders of magnitude more than a half-acre of grassland in Montana. A lot of the value comes from the beachfront itself, yes, but a lot more of the value comes from all the development around it. This is the whole basis for the business mod…

There is that, of course. But good courses also permit real estate companies to hold land for future development at a reduced cost, maybe even a profit, no?

Re: Why are there suddenly so many car washes?

#466

Post by alexb_ » Mon, Mar 18, 2024, 1:57 PM UTC

sethammons wrote: post #396

GeneralMayhem wrote: post #360

Earlier quoted context omitted.

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.

Which encourages destruction of natural lands

"Land" is shorthand for all of the natural resources on this earth. That means space, but it also means clean air and anything else extracted. Pollution and extraction taxes are different forms of land taxes.

Re: Why are there suddenly so many car washes?

#467

Post by alexb_ » Mon, Mar 18, 2024, 1:59 PM UTC

HideousKojima wrote: post #291

pkulak wrote: post #188

Earlier quoted context omitted.

> why should a politician need to step in to regulate, rather than letting the market decide? If we taxed land, then sure, we'd get efficient use of land. But we (mostly) don't, so here we are, surrounded by car washes and parking lots.

>But we (mostly) don't Just because we don't have Georgism doesn't mean we don't already tax land a ton. Annual property tax revenue for the entire US is ~$600 billion. By comparison, federal income tax revenue is about $2.6 trillion annually.

Property tax is not land tax.

Re: Why are there suddenly so many car washes?

#468

Post by ufocia » Mon, Mar 18, 2024, 2:01 PM UTC

smallerfish wrote: post #446

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…

> Land value taxes don't destroy natural land. They'd probably preserve it. Consider a farm on the edge of town. Without LVT, the incentive to sell could be considered positive; i.e. the farmer may sell when they're offered sufficient money for it. With LVT, the incentive to sell could be considered negative; they will be charged more and more in taxes from the state as the town develops up to the boundary of the far…

In some places farms already pay LVT like real estate taxes. Their real estate taxes are based on the value of potential farming operations on the land.

Re: Why are there suddenly so many car washes?

#469

Post by ejb999 » Mon, Mar 18, 2024, 2:10 PM UTC

GeneralMayhem wrote: post #360

_heimdall wrote: post #335

Earlier quoted context omitted.

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.

So where do the animals pay their taxes so they have some place to live after we make it economically un-feasible to keep land undeveloped by taxing raw land out of existence?

Re: Why are there suddenly so many car washes?

#470

Post by _heimdall » Mon, Mar 18, 2024, 2:11 PM UTC

hackerlight wrote: post #344

_heimdall wrote: post #250

Earlier quoted context omitted.

Thanks for all the details! Limiting a land value tax to densely populated areas is a great detail here. Sorry if I end up with a long list of follow-up questions here, this is really interesting. So my main concern related to destruction of natural land is that there is a disincentive to keep land natural if you have to pay the tax anyway. In dense areas that wouldn't be nearly as much of an issue, but it would stil…

> Is there a clear way to guard this system from building higher and higher economic centers Sorry, is this a bad thing? On the social side: In the current system, poor people are forced to live in ghettos and spend 2 hours a day on a round-trip commute. It's too expensive to live near their work. If we had a land tax, the rich enclaves near the city are now financially incentivized to open up their public schools an…

Both of these scenarios are a gamble and not guaranteed.

On the social side: the gamble is that social growth will outpace the increased economic pressure. Meaning, you need the new vertical growth to create opportunities faster than it increases prices further in the area. A land tax alone wouldn't pull people out of poverty, create affordable housing, or open up public school. Those are all just potential avenues for the city to develop, not guarantees.

On the environment: cities aren't isolated enclaves. Resources needed to build, maintain, and feed the city all come from the outside world. The more you build up the more steel, concrete, glass, energy, etc is needed. The more people packed into the city the more food you need to ship in and waste you need to ship out.