Hybrids are often cheap and are comfortable for urban utility. Both below are chromoly frames, alloy 700c rims, plenty of room for 38mm tires. Similar prices for similar quality MTB's, bought I try to stay away from frames under 16" size.
Bought in NJ Dec 2015 $45 - needs tires, chain, cables, housing, full overhaul, saddle
Bought in Detroit Nov 2014 $15 - needs tires, cables, hiusing, full overhaul.