Banksy once stayed (and painted) at this Manhattan hotel

Since the 1980s, the Carlton Arms has been a haven for artists seeking lodging

To call the Carlton Arms, on East 25th Street, an "art hotel" is almost misleading, since the term is often associated with trendiness and high design. "Artist's hotel" might do a better job of conveying the free-spirited creativity fostered by this budget lodging house.

Since the early 1980s, the Kips Bay hotel has offered free accommodation to artists in exchange for decorating one of its 54 rooms. When all the rooms had been adorned, the artists-in-residence started on the bathrooms, hallways, and stairwells. And now, three decades later, the entire four-floor building is an evolving gallery where every square inch of space has been painted, sculpted, spray-painted, or decoupaged.

The styles and quality of work vary tremendously since the artists are given carte blanche. Room 11D features a verdant landscape by Jean Michel Verret and Dominique Lagnieaux; a few doors down, 14D is filled with Andre van der Kerkhoff's Aboriginal-style dot painting. Two floors below is a rainbow room by Marijke Brinkhof next door to black-and-gray portraiture by tattoo artist Robert Hernandez.

When guests check in, they are offered their pick of the available rooms. Falling asleep surrounded by oversized cartoon mugshots may not be to everyone's liking—even if they are by Brooklyn illustrator David Cooper—but for street-art fans, or those who would prefer an out-of-the-box experience, it's a cool option.

Sarah Theeboom

A Banksy piece in the lobby of the Carlton Arms hotel.

The artists are mostly up-and-comers, but some went on to garner significant acclaim—none more so than Banksy, who decorated a stairwell and room 5B in 1999, years before he became the world's most famous street artist. His colorful murals of cartoonish animals are a far cry from the satirical monochrome stenciling for which he later became known.

But outside the lobby there's another early Banksy with more recognizable motifs: a fat cat politician smoking a cigar, a campaign poster of Elvis in Mickey Mouse ears, and a ballot box with a stick of dynamite wedged inside.

One of the managers, Hugo Ariz, says that Banksy—whom he describes as "a very funny, nice, regular kind of guy"—was experimenting with stenciling while at the hotel, and some of his practice stencils lying around somewhere. Ariz recently unearthed a rolled-up canvas that turns out to be a Shadowman painting by Richard Hambleton, the street artist whose sinister figures covered downtown Manhattan in the 1980s. Apparently, the Basquiat and Haring contemporary lived and worked at the hotel for a year; you can spot some of his pieces in the corridors and near the front door.

Has the hotel ever considered selling any of the work? Ariz says they've had offers on the Banksy pieces, but turned them all down. "It's an honor to have his art here at the hotel—we don't want to make money off it," he says. That disinterest in capitalizing on the art may be why the hotel maintains relationships with most of the artists it works with. In 2013, it provided logistical support during Banksy's month-long New York residency "Better Out Than In."

grego1402/Flickr

Most of the time the hotel's art isn't even on display to the public. The exceptions are in low season when two of the rooms are used as a gallery space, and during the annual unveiling of new rooms (around four to five of them are redecorated every winter).

Outside of those occasions, you'd have to actually stay in a room in order to see it. Since amenities are basic, the prices are suitably modest; a single room with shared bath costs $90 per night, a double room with en suite costs $160 per night, and even less in low season. Not bad for a Manhattan hotel.

It was good enough for Banksy, anyway.