Dupont Circle Church Redevelopment Opens With Corporate Housing Units
The developer of a Dupont Circle church redevelopment has brought on a corporate housing startup to fill its newly completed units with short-term renters, upsetting some neighborhood residents who have long opposed the project.
CAS Riegler has master leased 47 of the 51 units at its Madison House project to Zeus Living, a corporate housing startup that recently entered the D.C. market. The remaining four units will be set aside as affordable housing.
San Francisco-based Zeus Living was founded in 2015 and entered D.C. in October, its third market after its home city and Los Angeles. The company has leased individual units and chunks of apartments throughout the region, but Madison House represents the first full building it is taking over.
The company signed a five-year lease to operate the apartments at the Dupont Circle project. It fully furnished the units and began renting them out April 1. It has already welcomed tenants into 42 of the 47 units.
Renters can stay for as short as 30 days or as long as a full year, but they average about three-and-a-half months, according to Zeus Living D.C. Head of Real Estate Kyle Cissel. The building consists of 18 two-bedrooms, 18 one-bedrooms and 11 studios. Cissel said D.C. was one of the first cities to embrace the corporate housing concept, making it a natural landing spot for the company.
"The nature of D.C. is so transient, people are coming here nonstop," Cissel said.
The project at 1772 Church St. NW created a new home for the St. Thomas Episcopal Parish, which had its original home on the site destroyed by arson in 1970. The parish has since convened in a smaller structure that remained on the site, but it did not meet the church's needs, St. Thomas Parish Rev. Alex Dyer said.
The church then sold the land to CAS Riegler so it could rebuild a new church and the adjacent apartment building. The church is now waiting for its certificate of occupancy and hopes to open in the coming weeks.
"Churches are having to partner with developers more and more, and this is one of those opportunities," Dyer said. "Selling our property allowed us to rebuild on the original site of the church."
The project faced opposition from the Dupont Circle Citizens Association, which appealed its Board of Zoning Adjustments approval. The D.C. Department of Consumer and Regulatory Affairs issued a stop work order following a D.C. Court of Appeals decision, but the D.C. Superior Court then issued a restraining order lifting DCRA's stop work order and allowing construction to continue.
The developer later reached a settlement with the opposition group, ending the dispute over the project five years after it was first proposed.
Dupont Circle Citizens Associations Vice President Glenn Engelmann, who worked on the appeal, said his group opposed the size of the building and the level of historic preservation. He said he does not like the switch to corporate housing, but he does not plan any further litigation around the project.
"It's a bit of a bait-and-switch, frankly," Engelmann said. "Instead of adding more residents to the District who can be part of the fabric of the community, you're going to get short-term corporate rentals that are going to be here for a few months and leave."
Cissel said he thinks the residents will embrace the community. He said the developer picked Zeus because of the 30-day minimum stay, so it would force people to spend time in the neighborhood and wouldn't resemble a hotel.
"A lot of our clients have long-term outlooks. They want to be in the community," Cissel said. "We have a lot of families here. We’re not having people coming in for the weekend and partying."
Advisory Neighborhood Commissioner Kari Cunningham, whose district includes the project, said area residents should welcome anybody who wants to live in their community. But she said she has heard some frustration among her constituents about the corporate housing model.
"One of the arguments in support of this project was it would help contribute to the housing crisis we have in the District," Cunningham said. "Some of my constituents are a bit angered and question this change in model whether that really is helping address the housing crisis."
CAS Riegler principal Kevin Riegler said corporate housing companies like Zeus Living fill a demand segment in the housing market for residents that need more time than a standard hotel stay but don't want to sign a 12-month lease.
"There is absolutely a need in every urban market," Riegler said. "There's this middle ground of demand that revolves around extended stays whether that's relocations, law firms bringing people in for cases, people renovating their house or moving to a new town. This is a new dynamic in the real estate market."
Zeus Living is moving forward with plans to expand its D.C.-area footprint with more corporate housing projects. The developer is in negotiations for at least three new deals with multifamily developers to operate corporate housing in their buildings, Cissel said.
One potential deal would give it one or two floors in an apartment building in the Crystal City-Pentagon City area, where Amazon employees will soon begin working in its second headquarters. Cissel said he hopes to use Madison House as a model for its next D.C.-area projects.
"We're trying to replicate this in Northern Virginia," he said.
The Madison House building features amenities such as a fitness center, indoor-outdoor rooftop space and a dry cleaning service. The project's six penthouse units each include private outdoor decks, and five of them are two-level units.
Zeus partnered with several companies for the furniture and other offerings in the units. It worked with Article for the living room seating, Wayfair for the outdoor furniture, Helix for the mattresses, Parachute for the linens, Material Kitchen for the cooking appliances and Public Goods for the toiletries.
Zeus Living Head of Home Design Alex Burrow said it has studied its renter behavior and decided to focus its attention on the two things residents do the most.
"We found it was important to optimize for sleep and TV," she said.