There are half a dozen venues within a mile of me that have 3 bands a night five days a week. I also work with musicians that have full schedules of church gigs, weddings, etc on top of symphony and opera appointments. This is in a city smaller than NYC. I cant imagine NYC is any worse?
I can say that in the SF Bay Area, since 2000, probably three out of four small venues that used to host live music either have shut down completely, or no longer have live music. Maybe in lower COL areas it's easier to keep these venues going.
The rise of cost of living in urban environments has outpaced inflation quite substantially (certainly the real estate prices have) for quite a while. The colloquial gentrification cycle of gays -> artists -> college kids -> yuppies -> rich people requires a poor neighborhood as a starting point (usually a white one)... there's seemingly none of those starter neighborhoods anywhere in major cities, so the art and music has left the major cities.