- In the bowl of a stand mixer fitted with a dough hook, combine the warm water, 1 teaspoon sugar and the yeast. Let stand for 10 minutes, until foamy. Add the milk, two eggs and melted butter. Stir to combine. Add the flour, remaining sugar and salt, and mix at low speed for 3–4 minutes. Scrape down the sides of the bowl and continue mixing at medium speed for 6–7 minutes, until the dough is glossy, elastic and not sticky.
- Transfer the dough to a large well-oiled bowl and cover with a tea towel. Let sit for 1 hour in a warm, draft-free area, until doubled in size.
- Line two baking sheets with parchment paper. Set aside.
- For the filling, place the butter, chocolate chips, sugar and salt in a bowl and mix until combined. Set aside.
- For the topping, place the flour, sugar and butter in a small bowl and use your fingertips to mix until crumbly. Set aside.
- On a lightly floured surface, roll out the dough into a large rectangle about 15 × 11 inches. Spread the filling evenly over the dough, leaving a clean border all around. Roll the dough lengthwise into a tight log, then cut the log in half down the middle. You now have two stumpy logs.
- Working with one log at a time, cut in half lengthwise and lay each half side by side, cut side up. Pinch the top ends together, then twist the two halves together, like a spiral. Pinch the bottom ends together. Repeat with the second log.
- Transfer the babkas to the prepared baking sheets. Cover with tea towels and let rise for 30 minutes, or until noticeably puffed up.
- Preheat the oven to 375°F.
- Whisk the remaining egg and brush overtop of the babkas. Sprinkle with the streusel topping.
- Bake in the preheated oven for 30–35 minutes, or until golden brown. Let cool for at least 30 minutes, then slice and enjoy. This is also great when griddled with butter after a couple of days. Or, dip in beaten eggs and milk: Hello babka French toast!