I don't think there's a central hub for fiction writers in the world like there was in the 1920's when artistic people flocked to Paris. In modern day America, Brooklyn is probably the largest fiction-writing enclave as it's close to the big Manhattan publishers and on a cheaper side of the river.
Los Angeles has always been the world center for screenwriters. Places like Hollywood, Burbank, and the West Side, have coffee shops that are loaded with people working on their scripts. I feel that in recent years, however, Los Angeles has attracted more people who want to be novelists.
A big part of this is that people who want to be screenwriters get frustrated with the process of selling scripts, or their writing skills naturally shift more towards that of a novelist . Part of it though is that LA is a creative hub, and one that has better weather than NYC.
There are downfalls of being a novelist in LA. It's expensive, and much of your time is going to be squandered while you sit on freeways, packed in with thousands of other Los Angelenos.
The benefits though are clear: Los Angeles is so vast culture-wise, you get to witness the entire world condensed into one city. Beyond that, you get to watch as all these cultures come to LA and start molding into one. It's a fascinating sight to see and is the ultimate writer's paradise.
I'm afraid that in ten years it's going to be all but impossible for struggling artists of all types to survive in Los Angeles. It's about as unaffordable a place to live as you can get. What I would love to see though, is a growing community of novelists. Hopefully, the more successful ones stay here. And maybe through some miracle, struggling writers can continue to come.
One last huge benefit of being a writer in Los Angeles is that creativity is embraced here. You don't have to worry about being judged harshly because you love to write. Walk into many coffee shops and they're packed with people working on their scripts (and to a lesser degree novels). If you can put up with the excessive talk about the movie industry (which I love as well), you eventually find novelists talking about their latest projects. My hope is that at some point, novel talk gains more ground on screenplay talk. I think that's already happening.