It's BS. They converted several city owned buildings in the last city I lived in to open face "mural invites." Best thing ever. Every city should try it. Beautiful art all over.
My city has a huge bridge which is designated as graffiti area. Government even gives them paint sometimes. We use to have yearly competitions on it. These days every now and then new work shows up, but it's mostly inactive. That said, people are still allowed to paint there. It looks great what otherwise would be boring gray slab of concrete.