The Monterey Hostel (778 Hawthorne St., 831/649-0375, http://montereyhostel.com [1], $28/bunk, $62/private room) offers inexpensive accommodations within walking distance of the major attractions of Monterey [2].
Frankly, when it comes to rooms and amenities, this isn’t the best hostel in California. You must pay extra to rent a locker, there’s no laundry facility on-site, and the dorm rooms can be pretty crowded.
On the other hand, the hostel puts on a free pancake breakfast every morning, linens are included with your bed, and there are comfy, casual common spaces with couches and musical instruments.
And then there’s that location… You can walk to the aquarium [3] and Cannery Row [4], stroll the Monterey Bay Coastal Trail, or drive over to Carmel [5] to see a different set of sights.
Links:
[1] http://montereyhostel.com
[2] http://www.moon.com/destinations/california/central-coast/monterey
[3] http://www.moon.com/destinations/california/central-coast/monterey/sights/monterey-bay-aquarium
[4] http://www.moon.com/destinations/california/central-coast/monterey/sights/cannery-row
[5] http://www.moon.com/destinations/california/central-coast/carmel