Tax Base

In the past, Newport News has added to its tax base by developing industrial and business parks, fostering a friendly business climate and attracting large, capital-intensive industrial projects.  As the City runs out of developable land, newer methods that will be used to expand the City’s tax base. 

These include:

  • Net revenue surpluses from the development of high-quality, upper-income, mixed-use residential communities;
  • Property and business tax revenues from office and technology sector development; and
  • Sales, meals and lodging taxes from upper-end retail, restaurant and hotel development.

Residential development is becoming increasingly attractive as a strategy to enhance the City’s tax base.

  • The land that remains to be developed is becoming more expensive, encouraging developers to build higher quality, more expensive housing. 
  • Higher-density, new urbanist communities contain a much higher proportion of upper-end housing than has historically been the case in Newport News.   

Two trends highlight this shift toward the development of upper end housing in Newport News.

  • The per-unit value of building permits for single-family homes rose by almost 85% between 2001 and 2005, out-pacing the general increase in housing prices.   
  • Seventy-five percent of the multi-family housing permitted between 2001 and 2005 were for the luxury market.

The development of higher-priced housing will not lead to a housing shortage for middle and lower income households in Newport News.  Newport News has an adequate supply of affordable and middle-income housing.  As the following table shows, the City has a shortage of “upgrade/luxury" housing relative to the Hampton Roads region.

Table 2-2 Affordable, Middle Income, and Upper Income Housing in Newport News and Hampton Roads Source: U.S. Census, 2000. Prices are in 1999 dollars.
Housing Type Newport News Hampton Roads
Affordable (Below $80,000) 25% 22%
Middle Income ($80,000 - $150,000) 62% 50%
Upper (Over $150,000) 13% 27%

Office and Technology Development

The City has also added to its office/technology sector tax base during the past five years, with growth occurring at City Center at Oyster Point and Ferguson Enterprises/Wolesley North America.  Growth will continue at City Center and on land to the east of City Center and at the Ferguson/Wolesley campus.  The challenge ahead will be to maintain this momentum and attract a higher share of office and technology firms from outside the region.
 

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City Center Oyster Point Newport News (Popup full image) 
 

Retail Development

Newport News has expanded its retail sales tax base from 1999 to 2007.  Per capita retail sales in Newport News also increased relative to the region.  The Patrick Henry retail corridor has become the retail center for the Virginia Peninsula.  While most of the impetus for continuing retail development will be market driven and come from the private sector, the City should pursue strategic opportunities to raise retail development in Newport News through limited public-private partnerships.  This will maintain Newport News’ dominance of the retail sector on the Virginia Peninsula.