Three photos showing the size of the lot at 1337-1323 E Street, SE, which could be the site of the next Insight Development Group residential project
Photos show the site from left to right, facing South, viewed from the north side of E Street
The south side of Safeway is behind the photographer
Buchanan Developer Considers Second Major Project Near SE Safeway
Is Residential Market Becoming Oversaturated?
By Larry Janezich
ANC6B’s Subcommittee met last night to discuss what benefits and amenities might be exacted from developers who are seeking Planned Unit Development (PUD) status for residential projects near the SE Safeway. (Under the PUD process, a developer seeks a change in zoning to permit greater density than the zoning for a site would otherwise allow and the community receives benefits in exchange for the impact of the greater density on the community.) During the discussion, the community learned that Insight Development Group, the developer of the Buchanan School behind SE Safeway, is considering a another major residential project in the 1300 block of E Street, SE, on the large site currently occupied by Bowie Trash and Signature Auto, directly across E Street from Safeway. OPal LLC has already announced plans to build a residential complex in that block (See here: http://bit.ly/14qcnLZ) and will seek PUD status, as will CAS Reigler for its nearby development at 1401 Pennsylvania Avenue, SE. (See http://bit.ly/1F6lYGl ) The Buchanan School development is being built largely as a matter of right, though the developer is seeking some zoning relief in order to maximize the number of units without going through the PUD process.
Though no public meetings on the Insight development have been held, CHC learned in early May that Insight was conducting a feasibility study for the Bowie/Signature site at 1323-1327 E Street, SE. Given the certainty with which the project was described at the public ANC Subcommittee meeting last night, the project appears to have advanced beyond the study stage. The project was described as comprised of 1,2 and 3 bedroom apartments in a building comparable to CAS Riegler’s 180 unit building at 1401 Pennsylvania Avenue, SE.
Insight Property Group is not only the developer behind the Buchanan School project, it is also behind the Apollo H Street project at 600 H Street, NE, a mixed use project with 432 rental apartments and retail that will feature the H Street Whole Foods.
During last night’s meeting, one attendee – Gary Petersen, Chair of the Capital Hill Restoration Society Zoning Committee – issued a note of caution, speculating that the new residential market on Capitol Hill is becoming “oversaturated.”
Asked for additional comment, Peterson elaborated, “The number of people moving into the District has dropped below what it was six months ago. The developers near the ballpark in SE have gone through a bust and are now slapping up apartment buildings as fast as they can. Everybody is racing to get their building done so they can get it rented up.”
He pointed to the 673 unit project at 1333 M Street, SE; the 158 unit Hine project; and the 81 unit Buchanan School development and said, “I doubt there’s enough demand to fill all these places.”
(In addition, there is Goldstar’s 41 unit building at 1500 Pennsylvania Avenue which is just about to start marketing units, Donatelli/Blue Skye’s 354 residential unit building near Stadium Armory Metro stop on Reservation 13, a possible new mixed retail/residential Frager’s building, and the the Boys and Girls Club on 17th Street, SE.)
Peterson says if a project is not currently in the pipeline now, “it begins to look iffy.” Specifically, he pointed to the two proposed projects near the SE Safeway and the one at 1401 Pennsylvania Avenue, SE – although he noted that the last has filed a PUD application. Peterson predicted that not all of these will get built.
As this was being posted, CHC received the following comment from Trent Smith of Insight Development Group:
Thank you for reaching out. We are under contract on the Bowie’s trash and Signature Collision sites and are studying the possibility of redeveloping the sites into a multifamily community. We are still early in the planning process and are anxious to engage the community with more details soon. The proposed project would be four stories plus some residential basement and penthouse space. The current concept has approximately 160 units made up of 1, 2 and 3 bedroom homes.
We look forward to working with you and the community on this opportunity in the near future.
CAPITOL HILL CORNER 
Why focus on the development and market opinions of one person from CHRS? CHRS isn’t in the development business, these projects are outside of the historic district, and two of the three known plans are mostly rowhouses, not 12 story towers.
There’s also one factual error. Both CAS Riegler and OPaL have filed their PUDs, not just CAS Riegler. Moreover, the Buchanan School development has filed their BZA application and has interior demo permits. These projects are moving forward and there’s no indication that they won’t continue to do so.
As for the actual project, it’s going to be interesting to see what Insight comes up with. The site is actually over 13,000 square feet larger than the CAS Riegler development. But I think it would be a struggle to get anything more than R-5-B zoning through this current zoning commission/factoring in the comprehensive plan. So it would likely be a shorter/smaller development.
I believe there is a focus on CHRS because Capitol Hill Corner is anti-development. Reading this blog is like watching fox news – you’ll get your news – but you have to understand there is an inherent bias in the way that news is presented. But that’s just my opinion from reading this blog.
I could be persuaded that the rental market is tightening — large-city rental markets usually operate on slim margins. But the market for townhouse sales? Through the roof. Check out the closing prices for 1000-1500 sf homes in the last few years; it’s like the market crash never happened.
When a studio rents for $1,500 per month, the market is far from saturated.
As a side note, something can’t be “oversaturated.” It’s saturated or it’s not.
Excellent point re oversaturation, Michael! I had never thought of it that way! It’s kind of like…overdead or oversquashed. You are or you’re not.
Re Elizabeth’s request for a meeting to
consider what kind of density you like best
I have already considered that question and can tell you that I like lots of density. The more the better. More housing means means more people which means:
– Lower cost of housing.
– More and greater variety of retail.
– More and better public transportation due to more frequent ridership.
– More diversity.
– A larger tax base for the city.
– More families to support and advocate for local schools.
Yes to more density! And, yes, let’s organize to fight the (those) opposed to growth, diversity, better schools, more transportation, and better amenities in our neighborhood!
Tim
I’d like it if the ANC would organize a townhall meeting on multi unit construction. I’ll write to my representative tonight. Hope you all will do the same and consider what kind of density you like best. Time to organize.
I’m with Mike above. Bring on the density! I would much rather be growing with cool in-fill than stagnating and seeing investment money going elsewhere.
Incidentally, so what if developers build too much housing? Market saturation is their problem not ours. And prices will come down for people that are having a hard time affording rent.
Bring on the density. Bring on the in-fill. I WANT more people on the Hill and all up and down PA Ave is a great place to start.
Andrew
DC is becoming oversaturated with housing?
The Dramatic Five-Year Jump in DC Home Prices
http://dc.urbanturf.com/articles/blog/the_dramatic_five_year_jump_in_dc_home_prices/9721
This comment is just strange. Places that have been long-vacant holes n the ground are being bought and developed precisely because there is demand for more housing– not because the market is oversaturated.
“Asked for additional comment, Peterson elaborated, “The number of people moving into the District has dropped below what it was six months ago. The developers near the ballpark in SE have gone through a bust and are now slapping up apartment buildings as fast as they can. Everybody is racing to get their building done so they can get it rented up.”
This is outside the historic district, so who cares what Gary Peterson thinks. Not only is he wrong, but his agenda is to limit development. I implore Mr. Peterson to walk by this lot on a hot Saturday morning and enjoy the smell of garbage emanating from the trash trucks parked there. Heck, I’m willing to help with demolition if that will expedite the removal of those stinky trucks from a residential neighborhood.
One correction — the Bowie/Signature site is at 1343-1347 E Street, SE. 1323-27 is the location of the temporary Fragers
Whatever the larger housing market may be, the Hill is very much in demand and there is very little inventory. All of these projects are close to Metro and some even well zoned for schools. It makes sense to infill where outdated industrial properties remain, as long as it’s done consistently withn the existing neighborhood.
180 units may work for the CAS Reigler project on Penn near Jenkin Row but 160 units seems awfully large for E St. even at a relatively restrained 4 stories. I have no doubt 160 units could sell, but hope they consider mixed housing type like Buchanan. That model allows for rowhomes consistent with housing stock and apartments more consistent in scope with Hill apartment buildings. 160 units of apartments in this space has the potential to look like a giant box.
This is responsible development. Within walking distance of this location are two grocers and plenty of transit options to include: two metro stations, busses traversing the District, the circulator, and bikeshare stations. We’re talking about turning a parking lot- more specifically a garbage truck auto body repair shop- into a space the whole neighborhood could benefit from.
People around the District refer to our stretch of Pennsylvania Ave SE as lifeless and without personality. Instead of opposing every project in the pipeline like some individuals do, let’s support responsible development so we can have something to be proud of aside from the fact that we somewhat sorta kinda live in Eastern Market.
@YIMBY
you can support the project and still express interest in having it compatible with the neighborhood. The two are not mutually exclusive Compatibility is much more than x number of units delivered
That’s true (about compatibility) but there is so much hectoring of and so many ridiculous impositions placed upon developers in the name of compatibility that a raised eyebrow is totally justified.
For my part, I am fed up with the Restoration Society and their self-appointed role as spokesorganizaton for the entire neighborhood on development issues.
@Mike yeah, on some level the market should speak for itself. If a developer wants to take a risk despite a glut of projects coming on like that’s theirs to take, not CHRS. Plus these properties lie outside the historic district so it’s different considerations.
Developers can hardly complain about too many restrictions, whether it’s zoning adjustments, getting parking minimums waived, or getting rubber stamped through ANCs and as long as they avoid PUDs it’s pretty streamlined. They’ve mostly had a free hand the past 5-10 years, aside from some inherent limitations in the historic district, which comprises a small slice of the development pie. Even SEB ultimately got what they wanted with Hine in the historic district and nothing else has faced that kind of resistance.
@Anon, I kind of agree…kind of don’t.
SEB was delayed significantly by the neighbors’ lawsuit and that kind of delay adds risk and cost. This isn’t unique to Capitol Hill, of course, but it is an obstacle. SEB also had to jump through all kind of community inputs that added cost and delay though I did not follow it closely at all. So, it’s not regulatory exactly…but it is a legal environment that makes it easy to delay projects.
In terms of historic preservation regulation, somehow the Restoration Society manages to worm its way into development even when it is outside the historic district. For instance, I believe they were behind the blocking of Boy’s Town (yes, the charity for orphaned children) setting up where Jenkins Row is now.
Of course, the CHRS also famously fought the construction of a school for disabled children on the 1200 block of PA Ave SE (where the Frager’s garden center is now) which is in the historic district. That school, St. Coletta’s, ultimately quit fighting and moved out to the Armory in the face of the extraordinary nastiness of Dick Wolf and other Restoration Society leaders. (You can look up the open letter from St. Coletta’s to the community explaining their decision in back issues of the Hill Rag.)
The ANC is not a rubber stamp so much as it is irrelevant. They are a required extra step but case law says that as long as the HPRB/BZA/whoever explains why they are disagreeing with the ANC the ANC can be disregarded (and they usually are).
So…yes, I guess in the main I agree.
On a separate topic, it is kind of a bitter irony that a design as bad as the Hine School design got passed. The biggest development in 50 years and the Restoration Society and the HPRB –the guardians of the neighborhood!– stood by as another kludgey and awkward SEB / Amy Weinstein building was approved. The mind reels.
Mike
but weren’t the actions against Boys Town and St. Coletta’s ultimately the right moves? St Coletta’s wanted to use the driveway next to the shotgun house and its outdated curb cut for loading special needs kids. It was a totally inappropriate use of that space for a legitimate need that was better met elsewhere. Boys Town bullied into the picture via high placed Congressional supporters, but it was a terrible plan that was ultimately defeated for the betterment of the community.
How about some actual facts or data instead of the usual CHRS hysteria and fear-mongering? Or a second source even?
I wonder if his comments about some real estate slowdown might be applying to a certain type of property and not the overall market. I do think that one BR condo sales market my be significantly slower than it was – a unit like that 2 block away has sat on the market for a month – but that is also likely a combination of number of one bedroom condos and the price of that unit being set wrong given the market. As for the rental market beyond basements and small complexes we would need a massive number to significantly change the rates and I just don’t see that happening. Developers are building condos. Sure some of the M St. SE/SW went apartment instead of condo but that was because of what happened in 2007 not because developers wanted to build apartments. Much of what used to be rented on the Hill became owner occupied when the Hill got hot and until that changes prices on rental will only go up regardless density because most of that density is not likely going to be rental.
I am on the side of density but the argument that it will make rental and sales prices lower overall is not correct I think given the size of these developments and the nature of what types of units developers are turning out. For prices to change significantly massive buildings and many of them with less than luxury finishes would have to be built for that to happen while most of the projects are geared to luxury or seeming luxury (with prices being accordingly higher) and the number of units per project just isn’t huge. We hare not going to lower rental/sale prices with random luxury projects here and there with 20 or less units. I do think that density is a goal but for reasons other than trying to combat rising rental/purchase prices.
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