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FGCU professor warns prolonging eviction ban could lead to bigger economic problems

Posted at 7:35 PM, Jul 10, 2020
and last updated 2020-07-10 19:35:28-04

FORT MYERS — The ban on evictions and foreclosures has helped thousands of people who lost their jobs keep a roof over their heads, but it has now been extended twice, and the lack of payments are starting to have a bigger impact on the economy.

“We've taken a hit. Being fee-based, people don’t pay, we don’t get paid," said Cody Kellogg, the General Manager at Real Property Management in Fort Myers.

Kellogg says his company manages properties for many owners who are not independently wealthy.

“Majority of our owners, investors, are small, one or two man. They have a couple properties, they’re retired on social security. This is their income," said Kellogg.

But in at least two cases, that income isn’t coming in.

“We have one that is completely ignoring us right now. They won’t return our phone calls, text messages. Another one is basically saying I don’t have to pay. I’ve had medical bills come up, I’m paying them first. What can you do?” said Kellogg.

“The longer this is prolonged, it could be problematic for the system at large," said FGCU Economics Professor Tom Smythe.

Smythe said, if the renters can’t pay, eventually the landlords can’t pay the mortgage.

“Without cash flows coming in, that could push a lot of those landlords into very difficult financial situations, and ultimately have an impact on our banking system," said Smythe.

That’s something Smythe says is already happening. If you look at foreclosure data in Lee County, you can see a sharp drop off, with only two in May. In that same month last year, there were 119.

So for now, the banks are just eating the cost, but Smythe said, that’s not a long term solution.

“I think it’s become readily apparent that another stimulus package is probably needed, especially for those that are most likely to be out of work," said Smythe.

Kellogg said, if there is another stimulus package, it needs to include help for landlords.

“They can’t pay, the owners can’t pay their bills. It’s a chain effect," said Kellogg.

As of right now, the ban on evictions and foreclosures is set to expire at the end of the month, but it’s already been extended twice, and the Governor could choose to do so a third time.