More Virginia Beach innkeepers troubled by the sluggish tourist trade are seeking lower real estate assessments, a trend that is costing the city substantial tax revenue.

The drop in hotel and also commercial assessments has cost the city about $655,000 in real estate taxes this year, said Jerald Banagan, the city's real estate assessor.

Five more hotels have appeals pending and depending on the outcome of those reviews the city could lose an additional $100,000 in taxes.

"The decline in commercial property assessments is not unforeseen," Banagan said. "The decline in hotels -- we didn't see that coming. It's probably very indicative of the economy and the tourist industry."

The city has reduced assessments on 36 hotels -- about one-fourth of the resort city's inns -- by a total of $42.9 million. That figure represents a 21 percent drop in the overall taxable value.

Office parks, shopping centers and condominium developments are citing high vacancy rates and lower-than-expected incomes in their efforts to seek new assessments.

Although new construction is down from previous years, it is running above estimates for this year, helping make up for much of the loss in revenue. But the lower assessments are seen as a sign of a deepening slump in tourism, an industry the city traditionally has relied on to help keep the real estate tax rate down.

The value of new construction projects rose 1.3 percent in October on the strength of record government spending, despite the smallest outflow for residential housing in 4 1/2 years, the government reported.

The Commerce Department said overall residential, nonresidential and government spending totaled a seasonally adjusted annual rate of $434.4 billion, up from $428.9 billion in September. Construction spending was unchanged in August at $441.2 billion.

But 27 percent of the October total came from government funds, a 7.7 percent increase from September, to $117.8 billion. Much of the increase was from spending on sewer systems, up 15.5 percent; schools, up 5.7 percent; and streets and highways, up 5.5 percent.

Spending by the often-volatile government sector had fallen 5.5 percent in September after gaining 7.1 percent the previous month. But private spending continued its recent weakness.

Residential construction dropped 0.9 percent to $179.5 billion, its seventh consecutive monthly decline and the lowest since spending totaled $177.4 billion in March 1986. Residential spending was off 2.5 percent in September.

At the same time, spending on nonresidential construction slid 0.8 percent to $102.0 billion, the smallest amount since $100.0 billion in new projects got underway last December.

Overall, spending in October was 1.2 percent above the $429.3 billion posted in the same month last year.

Single-family spending fell 2.0 percent to $102.8 billion after a 3.1 percent drop in September despite a 1.0 percent increase, to $18.7 billion, in apartment construction.

Nonresidential spending slipped 0.8 percent to $102.0 billion following a 1.5 percent decline in September.

Chase Home Mortgage Corp. announced it is offering insurance to its home mortgage customers to cover payments in the case of involuntary unemployment.

The insurance protects homeowners for one year from the date they become unemployed. Premiums are based on the occupation and location of the insured as well as the structure of the individual mortgage.

Payments can start at $10 for each $500 of mortgage, Chase said in a statement.

"Chase believes that, in today's economic environment, unemployment insurance is particularly valuable," said Fred Koons, president of Chase Home Mortgage Corp. "It allows homeowners to protect their investment in their most valuable asset."

A sharp decline in real estate development is prompting the layoff of a small percentage of the Rouse Co.'s employees in Columbia, Md.

The layoffs will affect "considerably less than 1 percent" of the development giant's 6,000 workers across the country, said Cathy Lickteig, a company spokeswoman.

Lickteig declined to say precisely how many workers will lose their jobs.

"We just simply don't have enough work for some of these people. It doesn't make any business sense to continue keeping them on the company's payroll," she said.

IN THE BUSINESS ... Single-family home sales in Virginia totaled 4,183 in October, down from 5,498 in October 1989, the Virginia Association of Realtors reported. However, the group cautioned that year-to-year comparisons may not be totally accurate because of complications incurred while several local boards changed to a new computer system this year. Year to date, 56,282 homes have sold in the state, down from 63,621 during the first 10 months of last year. In Northern Virginia, the October total was 1,070, down from 1,451 last year, the association reported. Year to date, 15,608 homes have sold in Northern Virginia, down from 17,864 during the first 10 months of 1989 ... Dator Corp. and Rufus S. Lusk & Son Inc. entered a contract to publish tax assessment and recorded real estate sales data through a common database system in Northern Virginia ... The Urban Land Institute published "Real Estate and the RTC," a reference book edited by Washington lawyer Leonard A. Zax. The book is a guide for real estate professionals doing business with the Resolution Trust Corp. ... John Rossi formed JSR Structural Engineers in Silver Spring ... PS Commercial Properties Group Inc. of Springfield completed construction of PS Business Center. The $14 million complex has 164,000 square feet of office, industrial and research and development space in Springfield ... Bethesda-based Lightworks Construction Inc. acquired Kensington-based Rick Sniffin & Associates, which specializes in remodeling ... Laughlin Realtors in McLean and Metropolitan Home Realtors merged to form a firm with about 80 agents.

PERSONNEL FILE ... The Home Builders Institute, the educational group of the National Association of Home Builders, appointed Alan Zuckerman director for job development and outreach ... R. Dennis Worch was elected president of the District of Columbia Metropolitan Subcontractors Association ... The District of Columbia Building Industry Association reelected William O. Vose president for the 1991 term ... The Michael Cos. Inc. of College Park promoted Tom Milbourne to vice president, in charge of the development consulting division. The firm also hired Mike Stotz as vice president for business development ... Liza K. Bowles was named president of the National Research Center of the National Association of Home Builders.