Policymakers pursue a range of strategies aimed at diversifying neighborhoods despite research indicating the complicated and potentially damaging results of these efforts. One increasingly common approach is to incorporate the arts into planning efforts in the hope of enhancing diversity and catalyzing positive neighborhood change. Using data from the Cultural Data Project, the authors determine where newly established New York City arts organizations locate in terms of neighborhood racial, income, and industry diversity. They then analyze how diverse contexts interact with an arts presence to impact neighborhood economic health over time. They find that neighborhoods with high levels of racial diversity and low levels of income and industry diversity benefit most from an arts presence. However, the arts are attracted predominantly to neighborhoods with moderate levels of racial diversity and high levels of income and industry diversity. This complicates the use of the arts as a tool in urban revitalization policy.