My buddy and I came into Providence for a concert and needed a cheap place so we didn't have to drive back.
Price: Our one room with a bunk bed cost us about $33 per person after tax. This is much cheaper than anything in the area as most hotels were around $100 for the night.
Hostel Quality: The building's outside doesn't look good but the inside is nice and clean. Whoever restored the building's interior did well. There's a common area with kitchen and a large table as well as bathroom and shower room.
Area: The immediate neighbor doesn't look the best but its fine as long as you mind your business. Locals and other reviewers say similar. The worst thing we experienced was a homeless man asking for a cigarette. Otherwise, the location is great as its a 15-20 minute walk from downtime Providence. We had no troubles on our drunken stumble back from the bar.
Problems: I only had two problems. First, the morning we were to leave, the bathroom didn't have any toilet paper and since the local stores and restaurants don't have public bathrooms, my friend was forced to buy some. The second problem is that there is a bar directly below the hostel that played loud music until 1 am. I doubt this is a problem most nights but I could see this being a problem if its the weekend and you want to go to bed early.
Overall, if you're looking for a cheap place for 1 or 2 nights, Michie Hostel is perfect. I would stay here again.