Rising rents and the city's wave of development have meant the pottery studio he part owns has operated from three different premises and racked up about $100,000 in moving costs in five years.

"It's kind of a perfect storm," Mr Stone said.

He is among cultural producers squeezed from inner Sydney to the city's fringe and beyond as creative spaces shrink, property values climb and industrial buildings are swallowed by apartments.

Their experiences underscore the challenges cities face in allowing high-density development while preserving the culture and community that artists traditionally bring to the inner suburbs.

"Creative workers bring a particular vibrancy to a city," Sydney Business Chamber president Patricia Forsythe said.

"It's certainly a feature of our inner city and we wouldn't want to lose that. So we need to look at, what makes arts thrive?"

The dilemma was explored in a recent report from Western Sydney University's Institute for Culture and Society, which found urban development had deprived the city of work spaces for artists.

There had been a 65 per cent decline in the amount of industrial floor space in inner city Redfern and a 37 per cent drop in Green Square, between 2007 and 2012, the report said. Residential floor space in Green Square jumped by 23 per cent in that same period.

Mr Stone said his business, Claypool, had to look outside the inner city for a suitable studio space after its first Erskineville warehouse was demolished for units.

Then its new warehouse in Botany was also sold to developers and bulldozed for apartments.

A donation from a studio member allowed the enterprise to move to a more permanent home in the suburb. "It's been a boon," Mr Stone said.

But report co-author Professor Deborah Stevenson said a lack of secure tenure and financial pressures had forced many artists further afield to the Blue Mountains, Lithgow and rural areas.

"It's a double whammy with the cost of living in the city and the cost of working in the city," she said.

And despite the push for Parramatta to become a thriving artistic hub for the city's west, Professor Stevenson said inner Sydney locals could not always easily shift to the outer suburbs.

"There are simply some people who don't want to move and want to be close to their markets, close to where they show their work," she said.

"We've spoken to people in western Sydney and they say the same space pressures are there."

Demand for creative space has sent councils across the metropolitan area scrambling to make room.

Sasha Baroni, who is the City of Sydney's executive manager of creative spaces, said 1800 artists were on a waiting list for more than 50 properties the council offered as affordable creative space.

The report suggested the city promote better use and visibility of existing creative spaces, boost supply and map remaining industrial buildings to save them for potential cultural investment.

It also floated changes to zoning controls to encourage developers to create cultural spaces in new buildings.

"The city's doing an awful lot but it can't do everything," Ms Baroni said. "Ultimately, what you want to see is developers creating space by default."

Ms Forsythe said there was "no one policy that will guarantee the arts sector will survive and thrive in an area".

"What seems to work best is partnerships between business, government, education and the arts."

Sydney Fringe Festival director Kerri Glasscock said the shifting cultural landscape meant there was "real scope for fantastic things to happen in other parts of our city".

"We have to also acknowledge that cities change and they're a living, breathing thing and that's OK."