Budget travellers to New York are set to see prices increase dramatically next year as a ban on the short-term rental of apartments comes into force.

Under a law signed by New York governor David Paterson, visitors to the city will no longer be permitted to rent an apartment for less than 30-days.

Such deals usually see New York residents sub-let their properties during the holiday season, leaving the city themselves and generating additional cash from tourists.

Security fears were cited for the new legislation banning the tactic, with city officials hoping to close illegal and unsafe hotels. 

New York mayor Michael Bloomberg said illegal hotel conversions were unsafe and harmed the residential character of New York’s neighbourhoods, as well as removing much-needed housing from the area.

Such laws are already in force in Maui and the city of Paris, France. 

Those opposed to the law, however, argue it will reduce the choice on offer to visitors to the city – which remains the United States’ most visited destination.

Manhattan, in particular, enjoys a reputation which sees guests rent cheaper accommodation than in traditional hotels.

Fighting Back

Stephen Rapoport, who founded spare room site Crashpadder.com, told reporters the law is “staggeringly short-sighted.”

“Homestay accommodation pre-dates the Bible and it will not be ‘stamped out’ as the hotel industry would no doubt like,” he added.

“All this new policy will achieve is pushing these people back into the shadows of the economy where there is no security for either party.

“I can envisage this directly benefiting scam-artists and hoteliers and no one else.”

Campaigners are also hoping, because the New York State Senate’s vote to approve the bill was close, pro-tourism forces may be able to narrow the application of this far-reaching prohibition later.

In a chink of light for the city’s tourism industry, the bill presently excluded bed & breakfast accommodation – where homeowners rent out a spare room to visitors, but also remain in the property themselves.