Left out of state and national eviction moratoriums, Florida businesses could find relief in a bill that would set up a $543 million rent stabilization fund and put a stop to commercial evictions.
Filed by Democrats Rep. Carlos Guillermo Smith of Orlando and Sen. Annette Taddeo of Miami, House Bill 1469 and Senate Bill 2002 seek to help small businesses that make less than $250,000 a year in profits that have gotten behind on rent.
“The reality is there are small businesses that have been evicted because they were not protected,” Smith said, adding that he hoped there would be bipartisan support for the initiative given that Florida often touts its business-friendliness. “Landlords are wanting to be very lenient and are working with their small-business tenants, but eventually they need to get paid.”
The fund is similar to other programs set up in Orange and Osceola counties to prevent residential evictions, requiring both the tenant and landlord to agree to participate. It would cover half of a business’ back rent; the business would agree to pay 25% of what it owes; and the landlord would agree to forgive the other 25%.
Only businesses that saw a 25% decline in revenue because of the coronavirus pandemic would be eligible.
The Department of Economic Opportunity, the same agency that administers unemployment checks, would review applications and disburse the funds. Payments would go straight to landlords.
Smith said he got the idea from one of his constituents, someone who owns a dry-cleaning business in Orlando who saw business dry up as workers swapped business casual for “Zoom shirts.” He said the $10 billion in aid the state is set to receive from Biden’s stimulus package would cover the cost.
Gov. Ron DeSantis issued a moratorium on residential evictions in April, but he left out commercial renters. When asked why they were not included, Meredith Beatrice, a spokeswoman for the governor, said “the order protects mortgage holders from the threat of foreclosure, which, in turn, protects their tenants.”
However, DeSantis let the state order expire at the end of September, stripping away that protection against foreclosures. The CDC issued a national moratorium that’s still in place, but it only applies to residential tenants.
Other states have ordered freezes on commercial evictions, as a coalition of lobbies for restaurants, hotels, franchisees and tourism businesses urged state governors to impose a 90-day rent abatement and eviction ban. But Florida’s business groups seemed divided on whether businesses should have been included in DeSantis’ order.
Carol Dover, president and CEO of the Florida Restaurant & Lodging Association, said commercial evictions needed to be stopped. But Bill Herrle, executive director of the Florida arm of the National Federation of Independent Business, said that would just be “pushing the problem upstream.”
There were several programs opened up to businesses struggling to stay afloat during the virus outbreak, but Smith argued they weren’t enough. For example, the federal Paycheck Protection Program provided forgivable loans, but giant corporations quickly gobbled up a majority of the money. In Florida, DeSantis activated an emergency loan program usually reserved for hurricanes, but it was drained after less than a month and forced to turn away 37,000 small businesses.
Smith and Taddeo were not coy in explaining why they decided to allot $543 million to the proposed rent fund. It’s the same amount of money Florida leaders gave in tax refunds to corporations last year.
DeSantis and the GOP-controlled Legislature went ahead with the refunds even as the state’s tourism-dependent economy collapsed amid the coronavirus pandemic and the state faced a $2 billion deficit. They had committed to paying the refunds two years earlier, and the governor’s office argued that corporations “have anticipated these refunds and have likely made business decisions around them.”
“What we’re saying here,” Smith said, “is that small businesses deserve at least the same amount of direct relief from the state as large corporations were given.”