Italy isn’t quite as well set up for the international backpacker crowd as some other countries in Europe. You can find budget hotels in Venice or Rome and Florence with communal kitchen and 24 hours free internet but most of the time you’re looking at staying in youth hostels.
Italian youth hostels vary a good deal in size and appearance but most preserve the original Christian/boy scout ethic that can only be described a quite joyless. They have curfews at midnight, they kick you out between 10 and 3 in the afternoon and all the dormitories are single sex. Still, at around 16 euros a night it’s often the cheapest place to stay.
You can do cheaper stays if you carry a 2 kilo tent from a supermarket on your back. Most towns have a camping and then that will cost around 8 euros and adult + 5 for the tent. There’s hot showers and drinking water and if, not quite as comfortable, at least you don’t have to listen to anyone snoring. The only drawback is putting up with the Christmas spirit of joviality and good neighbourliness that seems to infect everyone the moment they pitch a tent next to other Europeans.
Albergos, Italian guesthouses can be quite reasonable if you’re travelling as a couple with beds going for around 40-50 euros off season.
For those planning to live in Italy, long term accommodation can be tricky to find. With most Italians living with their families and an inordinate amount of properties owned by the Catholic Church, it’s often a landlord’s market. In places like Bologna or Rome where demand is high for apartments it’s not uncommon for a single room to cost around 400-500 euros.
Italian students can’t afford that of course and so you have the phenomenon of posto letto where a bed is rented in a shared room, hopefully with a curtain drawn across the middle to afford some privacy. Even one of these can cost around 250-300 euros.
To find an apartment or a room in Italy check out your nearest lamppost for advertisements for roommates or tenants. Newspapers may carry some ads and you can also apply via a real estate agency which usually have some places on the books. They take a commission though and the bureaucracy might be a little more involved.