When the ship is sinking, the rule is “women and children first.”

After them, etiquette for who deserves an open seat in a lifeboat gets a little murkier.

The same is true of the housing market. On Capitol Hill, lawmaker after lawmaker expressed support for rescuing unfortunate, impoverished American homeowners who were victimized by unsavory subprime mortgage lenders.

After them, though, opinions were mixed.

Speculators shouldn’t be helped, some said, because they were only in the market for money, not the dream. Nor should we help those who knowingly borrowed beyond their means – they merely reaped what they sowed.

Discretion, though, is the enemy of crisis. Rescuing homeowners in need meant tossing the lifeline to everybody, which is why President Bush is reluctantly signing a housing bailout bill.

Saving some was preferable to losing them all.

This move was unexpected, and signals a philosophical shift about government intervention. While many Democrats supported the rescue as an obligation, many Republicans insisted on personal responsibility.

Bush’s signature on the housing bill validates neither position, but rather endorses the utilitarian third option: While government salvation of the housing market is unpalatable, it is a political and practical necessity.

This is an expansive backdrop for conversations on all government levels where the housing crisis is hitting home. One example is Auburn, where city councilors are considering delaying liens on a condominium development partly financed with public funds.

The Stevens Mill condominiums utilized a $250,000 loan from Auburn’s fund for low-income housing. Councilors are advised to delay liens to preserve the city investment; a note-holding bank has also agreed to put off foreclosure.

Auburn councilors are in a similar predicament as the president: Weighing an action some may find objectionable, but one with the city’s best interests at heart.

In this case, however, the decision is softened by the bank’s agreement to slow foreclosure. Yet there will still be voices in Auburn who maintain private investments, like these condos, shouldn’t be shielded from market forces.

The trouble with this latter view, which President Bush arguably recognized, is that government fortunes are intertwined with the housing industry. Downturn in the latter could have serious repercussions for the former.

This relationship is magnified on the local level, where municipal governments generate their primary revenue from property taxes. From a financial perspective, it’s wisest for Auburn to delay the liens, and hope the market returns to enough prosperity to pay its debts and taxes.

There are other issues as well.

A large condo development in foreclosure could become a blight, or drag property values as a whole. Social issues surrounding foreclosure have also become all-too-well understood as this crisis has unfolded.

With all these factors at play – plus copious political and other pressures – President Bush found himself having to hold his nose and sign the housing bill.

Now faced with a similar choice, Auburn may have little option but to do the same.


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