The Issaquah City Council unanimously authorized the mayor to execute a memorandum of understanding (MOU) with the nonprofit Acres of Diamonds that will release two long-standing affordable-housing restrictive covenants on two duplex properties in exchange for negotiated financial safeguards and project commitments.

City Attorney Rachel Bender Turpin told the council the properties were originally encumbered after permit-waiver agreements in 2005'06 and 2012, when nonprofit Compassion House developed the duplexes for transitional housing. Acres of Diamonds acquired the units in 2019 and operates them as transitional housing for women and children. Under the proposed MOU, Acres would reimburse the city for previously waived permit and development fees adjusted to today's dollars and repay the cost of heat pumps installed under the city's low-income program. The city estimates proceeds from selling the two properties could be about $2,000,000; the MOU would require those proceeds to be held in a restricted escrow and not released to Acres until the organization has raised $6,750,000 toward a new Family Renewal Home project.

The Family Renewal Home is estimated to cost approximately $12,000,000 and would add about 24 units and on-site child care, more than doubling Acres' current capacity. The memorandum allows the properties to be sold at market value so proceeds can fund the new facility; if Acres fails to proceed with the family renewal project within three years, the parties will meet to determine how to best use the restricted proceeds to support women and children in the region.

Council members expressed concern about preserving affordable housing but supported the negotiated protections and the objective of creating more regional affordable housing. The motion to authorize the mayor to execute the MOU passed 6-0.