1. I don't want to stay in a hostel. See below for more on this; but, hostels, at least the ones I have researched, have bunk rooms and shared facilities. Hard pass for me.
2. I don't like sharing a bedroom and, especially, a bathroom in someone's home when they may be there. There's simply a different level of security (potentially false, I understand) in a hotel vs a rented room in a house.
"Hostel" may mean different things in different parts of the world. When I was growing up, I heard about "youth hostels" that were mostly in Europe and mostly providing inexpensive accommodations to college-age people who were backpacking through the continent or had a Eurail Pass for traveling, etc. But I have never stayed in one.
When I surveyed a few hostels in Hollywood, it seemed that they were indeed targeting college-age people. Furthermore, they were cultivating a "package deal" atmosphere where there were day trips and coffee hours and programmed activities, for residents to do while they were there. And with limited privacy and shared facilities, there could be bustling activity and interruptions of sleep all night long. They did not seem like places to check in, crash overnight and leave in the morning. And that is probably calculated to appeal to the clientele who are not homeless and did not simply save up $40 by panhandling during the past week.