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You will need to continue to grow your Banyan Tree as an indoor plant in your growing zone.
It will not survive the cold growing conditions in zone 8, even if covered.

https://www.gardeningknowhow.com/ornamental/trees/banyan/growing-a-banyan-tree.htm

I'm sorry, but your neighbor is correct. The Banyan Tree should not be planted near any homes, foundations or water and sewer lines.
Here is a link with more information.

https://www.gardeningknowhow.com/ornamental/trees/banyan/growing-a-banyan-tree.htm

Banyan Trees should not be planted in an urban situation.

https://www.gardeningknowhow.com/ornamental/

Banyan Tree grow in zones 10-12, so it's doubtful you could find anything local.

https://www.gardeningknowhow.com/ornamental/trees/banyan/growing-a-banyan-tree.htm

The banyan tree isn’t flowerless. But its flowers lie inside its fruits and are enveloped by a thick layer of fruit flesh. So people can’t see them from the outside. When cutting open a banyan fruit, we can see many pink bits growing inside. These are its flowers.

I would not cut the root as this could do a bit of damage to the tree. If you do cut, then you may lose it, but there is a chance that it could recover. Just prepare to, potentially , lose the tree.