Subject: Re: hostels in San Francisco
Ako, The Obrero Hotel should suit your needs. It is a Basque hotel located in Chinatown at 1208 STOCKTON STREET, Tel. 415-989-3960. A 30 minute walk to Union Square or even quicker bus ride. A website with reservation request can be found at the following link:

I have not stayed there but I did stop in and look at the rooms one day. Small with most sharing a bathroom down the hall (at least one with the batroom en suite). A hearty Basque breakfast included with price of room. It is on a busy street in Chinatown above a produce market. The price meets your requirements as does the proximity to Union Square.