If this is really such an easy way to make a city grow economically why aren't the artists making money off of this to fund their next move?
The economic benefits to the city of having a thriving art community might be diffuse enough across many people that there's no one person or group willing to pay individual artists to provide the benefit. That is, it's mostly a positive externality / public good.
You could ask the municipal government for pay for it, the way they pay for roads and other services, but then you'd have the problem of establishing some sort of worthiness standard to ensure the system isn't just being taken advantage of. The determination of such a standard, besides being possibly unrealizable, would probably undermine the creative spirit it's designed to foster.
I actually think part of it is more to do with people with money trying to buy the experience of art and culture rather than the product itself. As a pro musician I experienced that. Wealthy people want to hang out with the band, and get access and "rough it a bit" sometimes. It does result in artists getting paid, but often it results in people buying expensive coffee while looking at art, buying a slighter nicer house near the artists...
It's hard to describe but my anecdotal first hand experience includes plenty of rich tourists hanging around the emerging cultural hubs. I sincerely think the money goes into feeling cool rather than fueling the art economy, it's the surrounding bars, restaurants and cafes (and property developers) that end up making the big money. As mentioned elsewhere - the artists end up gone, the soul of the place eventually goes, and they end up with those weird soulless expensive places that used to be poor and full of artists.
The economic benefits to the city of having a thriving art community might be diffuse enough across many people that there's no one person or group willing to pay individual artists to provide the benefit. That is, it's mostly a positive externality / public good.
You could ask the municipal government for pay for it, the way they pay for roads and other services, but then you'd have the problem of establishing some sort of worthiness standard to ensure the system isn't just being taken advantage of. The determination of such a standard, besides being possibly unrealizable, would probably undermine the creative spirit it's designed to foster.