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When word came earlier this year that CBGBs, the New York club that spat US punk rock into existence in the 1970s, may be priced out of its building, the news was confirmation - if anyone still needed convincing - that the boutique-ification of Manhattan was complete.

But the shaky state of affairs at CBGBs - where the Ramones, Blondie, Television and Talking Heads cut their teeth - was just one example. In recent years, half a dozen other downtown music clubs have either closed or are fighting to hang on. Skyrocketing rents are the main culprit, while tougher noise laws and the ban on smoking have added to the burden.

Is Manhattan pricing itself out of the market for live music? The question goes to the heart of New York’s self-image. The hungry young punks living downtown have taken their place in the city’s collective imagination alongside other New York artistic archetypes - the spattered painter in his SoHo studio, the struggling actor rehearsing lines in a cramped Hell’s Kitchen apartment.

But now it looks as if there is no longer enough grit in Manhattan to produce a vibrant music scene. Chefs are the new rock stars in food-obsessed Manhattan, where you can spend close to $1,000 on dinner for two and still leave sober. The Hotel Chelsea, where Sid and Nancy holed up and Andy Warhol filmed his methedrine-addled Chelsea Girls, now charges up to $350 for a suite. The meatpacking district, long a destination for transvestite hookers, is teeming with trendy restaurants catering to the Sex and the City crowd. And down on the Bowery - home to CBGBs for 32 years, and one of the most depressing streets in the city for much longer - boutiques sell fancy handbags and shoes.

With the average selling price of a Manhattan apartment at $1m and cheap rentals scarce, the question is whether anyone in the city can afford to take artistic risks anymore. Everyone has to work too hard to pay the rent - and that still leaves the problem of finding an affordable space to practise.

Survivors of 1970s New York love to complain about today’s sanitised, high-rent city. But not everyone thinks it’s a problem, including, surprisingly, CBGBs’ owner, Hilly Kristal, who opened the club 32 years ago. Though dismayed by his landlord’s threat to double his rent to $40,000 a month, he doesn’t blame his new neighbours. “I think the changes to the neighbourhood are great,” he says. Sure, the boutiques across the street sell $400 handbags, but he likes the Bowery’s new culturally diverse residents.

The old Bowery has been wrongly romanticised, he adds. Above the club was a flophouse, many of whose residents were drug addicts. “Back in 1989 and 1990, we had a big problem here with a crack epidemic,” he says. “People came out of institutions and they were living upstairs. The cops couldn’t control it.”

The scene could not be more different today. New York’s success in combating violent crime, begun by Mayor Rudolph Giuliani in the 1990s and continued by Michael Bloomberg, paved the way for the real estate boom downtown. (The seedy history of the Bowery and other punk-era haunts now lends a whiff of romance to the area - perhaps inflating values still further.) But the crime war victories have also eased migration to once-tough neighbourhoods in Brooklyn, where rock clubs and art galleries are sprouting up.

Brooklyn’s clubs, most of which are only two or three years old, are coming into their own as destinations for touring and local acts. Most, though not all, of the new clubs are concentrated in Williamsburg, a Brooklyn waterfront neighbourhood where taxi drivers were reluctant to drive as recently as the mid-1990s. The Williamsburg scene has already seen the rise and fall of a musical mini-movement called Electroclash - punk-inspired dance music - and a number of New York’s most promising new acts have started there.

The better-known ones linked to Williamsburg include The Liars, TV on the Radio and the Yeah Yeah Yeahs, groups that can be squeezed into the unhelpful punk-funk or post-punk categories. But Brooklyn is also home to Antibalas (a Fela Kuti-inspired funk act), a number of electronic groups and a small bluegrass scene.

This has been met with some sneering and condescension from the veterans of Manhattan’s rock scene. Their first complaint - “Who’s going to cross the river to go see a show?” - is easy to dismiss. But many also label the Brooklyn scene as “derivative” or “too earnest”.

The pressures on Manhattan’s nightclubs come not long after the press declared that New York was back on the musical map. After a fallow period during the Giuliani era of the 1990s, people began paying attention to New York rock once again. The Strokes, a group of good-looking Manhattan boys who had absorbed the sounds of their 1970s forebears, captured most of the headlines. Lately, the focus has been on DFA Records, a New York label headed by James Murphy that produces LCD Soundsystem, Black Dice and other underground favourites.

Sadly for CBGBs, none of the groups to gain attention in recent years are particularly identified with the club, if they have even played there at all. As Kristal confided to me, CBGBs’ best hope for the future may be as a museum. People often drop by in the daytime to look around or buy a CBGBs T-shirt, but the place has not been a reliable hitmaker in years.

Brooklyn is emerging as the place where bands can work out their sound and make mistakes in small venues - the traditional role of CBGBs and others. Not long ago, a former Manhattan club owner told me that his patrons were pleading with him to remain open to keep the small-club scene alive on the Lower East Side. “It’s all moving across the river,” he said.

But Manhattan’s small clubs are still fighting to hang on. Tonic, a Lower East Side home for experimental music, has been holding benefits to keep its doors open; Yoko Ono and Sean Lennon performed there recently to raise money. The Bottom Line, where everyone from Lou Reed and Bruce Springsteen to Charles Mingus and Waylon Jennings played, is looking for a new home after ending a 30-year stint in the same building. And Kristal is urging fans to petition City Hall to help save CBGBs.

Of course, New York has always been an unusually cruel town in this regard. In the 1960s it levelled the old Metropolitan Opera House and Carnegie Hall barely escaped the same fate. The great jazz clubs on 52nd Street - where Charlie Parker, Thelonius Monk and Ella Fitzgerald played - were destroyed after they fell into post-war decline. All that is left of “Swing Street” is small plaques on the sidewalk.

”It’s not my city any more,” says Legs McNeil, whose magazine, Punk, was the bible of the 1970s scene. (His highly entertaining book, Please Kill Me, is the best chronicle of the time.) “I don’t know where these kids get $2,500 a month for rent. I don’t know if I would move here now if I were 15 or 16 - it’s just too expensive.”

McNeil believes that no good music has come from New York in 20 years - a position that is untrue but understandable coming from a man who saw the Ramones buzz through their first live sets. However, he does pinpoint the crucial difference between the New York environment that produced punk and that of today. “In the ‘70s, everybody had abandoned New York and it was great,” he says. “It was like all the adults had left.”

Now the adults are back - and they want to own property and raise their families there. Even in Williamsburg, the pavement is packed with hip young couples pushing baby strollers. In McNeil’s old neighbourhood, the East Village, the police used to fight with junkies and squatters. “Now it’s all mommies,” he says. “I preferred the bums.”

As yesterday’s bohemian scenes become more family-friendly, the artists and musicians are venturing ever further out. A guitarist friend has just moved his studio from SoHo in Manhattan to New Jersey. And musicians are finding cheap practice space in Bushwick, a Brooklyn neighbourhood that became synonymous with arson and homicide in the 1970s and 1980s.

Cheaper space is not the only thing driving them into sketchier areas. Retreating to old industrial zones or neglected neighbourhoods gives artists a modern approximation of the old “no adults” New York of McNeil’s memory, where they can do what they want. This was what brought the first artists to Williamsburg in the 1980s, and explains why they are leaving for new frontiers today.

Not long ago, a Brooklyn musician friend took me to see a show in Bushwick, a neighbourhood whose name still sends chills up the spines of long-time New Yorkers. We parked on a desolate street lined on one side with active industrial buildings; on the other was a row of sad-looking houses.

The music was throbbing out into the street, and we climbed a narrow staircase to find an unlicensed club crammed with hundreds of young bodies. The bar was dispensing what was claimed to be absinthe, and there was no ban on any kind of smoking. Entering a room where a band was playing, we were faced with a woman standing on a rack of amplifiers, screaming into a microphone and hurling cans of beer. It felt as though the floor could cave in at any moment.

Back out in the hallway, I caught a glimpse of Mark E. Smith, the famously dour singer from The Fall. In many years of avidly following his career, I had never seen the man laugh or smile. Tonight it appeared he was doing both. He would take the stage later, and his set was complete by 4am.

The evening felt illicit and thrilling, much like a night several years ago in New York when I saw a jazz band performing in an illegal squat - amplification courtesy of bootleg wiring - in the East Village. The outlaw spirit was inspiring.

It’s not uncommon to hear established New York artists - writers, musicians and painters - express pity for the current generation. The idea of carrying out youthful artistic struggles anywhere but Manhattan is unthinkable to them.

But the strength of New York has always been its ability to attract people who want to create something. Whether they are working on the Bowery, up in Harlem or in an as-yet obscure part of Brooklyn or Queens is beside the point. The good news is they are still coming. There’s plenty of grit left yet - you just have to venture further out to find it.

Copyright The Financial Times Limited 2017. All rights reserved.

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