Could Housing Bill funds be used in projects that use eminent domain?

So says John Berlau over at the Competitive Enterprise Institute’s OpenMarkets.org blog.

Language that protects property rights has curiously disappeared from the housing bill that the House of Representatives passed yesterday.

Three years after Kelo, Congress has still to pass legislation to ban the use of federal funds in economic development projects that use eminent domain. So that makes the following situation possible:

To their credit, the drafters of the Housing and Economic Recovery Act of 2008, which passed the Senate on July 11, at least recognized this danger of throwing billions in construction grants to state and local goverments. So they put in a clause stating, “No funds under this title may be used in conjunction with property taken by eminent domain, unless eminent domain is employed for a public use.” The clause then adds that “public use shall not be construed to include economic development that primarlily benefits any private entity.”

But this language has vanished from the House bill that passed yesterday, replaced with phrasing that at first glance may seem simlar but would give governments subtantially more leeway to take land. The nearly 700-page bill craftily replaces the Senate’s prohibition on funds “used in conjunction with property taken by eminent domain” with a looser ban on using the funds for a “project that seeks to use the power of eminent domain.”

This new language in the House bill would give property-grabbing bureaucrats an easy way around the supposed prohibition on using eminent domain. All they would have to do is take property for any reason that Kelo allows, and then come up with another project for the specific use of that property. If land were grabbed for general economic development, as Kelo permits, and then a new project were created for a city to sell this land to developers, this would likely not be a violation of the House bill. After all, the new project isn’t “seeking” to use eminent domain, it is merely using land that had already been confiscated.

How the language was removed and who removed it remains a mystery.