In theory this scales forever. Considerations are eggs-in-one-basket vulnerability to attack and existing residents never ever like this kind of thing.
But the point is that if a strong enough city to begin with institutes a UBI it will grow and increasingly pay for itself until it faces competition and levels out.
This will only scale as long as the infrastructure is able to keep up. Once you exceed the limits of the existing infrastructure, you face increased inefficiencies until the point where these negate any scaling benefits. So in addition to the costs of an UBI, there would be the additional costs of massive infrastructure investments.