Budget travel to New York City has been dealt a severe blow from a new law that will ban the short-term apartment rentals often used by vacationers from May 2011.

Under a law signed into force by New York governor David Paterson last week, renting an apartment for under 30 days will be illegal, in an attempt to weed out illegal, unsafe hotels.

New York City Mayor Michael Bloomberg said that illegal hotel conversions were unsafe and harmed the residential character of City neighborhoods, as well as removing much-needed housing from the area.

However, opponents of the law say that it will harm the choice of budget travelers looking to visit New York, which is the United States' top tourist destination for both national and international visitors.

It is also likely to significantly disrupt the business of budget travel websites such as AirBnB and Crashpadder.com, which specialize in helping apartment-dwellers rent out their digs to travelers at low prices.

Stephen Rapoport, who founded spare room site Crashpadder.com, told Relaxnews that 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 emphasized.

"The advent of social media has empowered people to interact in many real-world ways - offering one another overnight accommodation is just one - in a way which is safer and simpler than the alternatives."

He believes that the policy could be very damaging for tourism to New York and potentially even the people who visit.

"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 benefitting scam-artists and hoteliers and no one else."

The members of http://protect-vacation-rentals.com/, a website set up to campaign against the law, have vowed to "continue our work and roll up our sleeves."