City aspects can be compelled or used for declarations just like any other aspect, as long as you are in the city. Same thing with locations if you are in them.
For instance, lets say you have an aspect like "Urban decay is running rampant" for the city. A PC is chasing and NPC down a street, and the NPC turns to run down an alley. The PC could declare "The alley he ran down is blocked by debris from the partially collapsed abandoned building that is next to the alley.", thus giving him a chance to catch up to the NPC who is now backed into a corner.