I'd have to agree with other reviewers on this site, the Brooklyn Arts is a gorgeous place to stay but it is let down by some basic maintenance issues.
We are 'arty' types and we love anything with character and eclectic taste, however this place is in serious need of some TLC. There's just no excuse for having 4cm gaps under the bedroom doors (especially with Melb's freezing weather), ricketty floors with missing floorboards are an OHS inccident waiting to happen, and stained sheets are a no-no in any kind of hotel. It's a beautiful old building and could easily be updated while still maintaining the reuse themes. These items we could put up with, but the biggest issue for us was the noise and lack of privacy. We could hear EVERYTHING from the rooms next door, we had people looking in our window everytime they walked past, and some guests seemed to find it hard to find their own room, walking into ours instead. As a result we were also conscious that other guests could hear us and so we didn't feel comfortable in our own room.
On the plus side - the location is fantastic! Right between the Fitzroy and Collingwood strips, and an easy tram ride into the city. The building is beautiful, the gardens are a lovely, relaxing place to chill out or read and the hosts are friendly and accomodating. They also have an area available for luggage storage if you arrive early/leave late, and the Star Bus shuttle services this hotel to/from the airport.
I would recommend the Brooklyn Arts Hotel for single travellers who need good access to the Fitzroy area.