Of course it's not hard to write about subjects like what's going on locally, the best restaurants and cafes, interesting landmarks, and your impressions of living in a particular city (or even suburb).
It's trickier if you are blogging mainly for business purposes, however. You have to think about your target market much more. So your focus narrows.
This blog could be said to fall into this category. Basically, I'm in the B2B niche. So I've got to think about what other local business owners will be searching for. I haven't been doing that as much as I should but when I have done so it tends to work.
An example is a post from a little while ago. It's about cheap photocopying in Perth. I have ended up on page one for this search and continue to get a small but consistent trickle of visitors from it.
There are tons of similar searches that could be targeted. A quick visit to Google's drop down suggestion box returns many with potential such as "best website design Perth", "cheapest computers Perth", "Perth refurbished computers".
Needless to say, there's a bit of competition for some of these. But if I write numerous informative blog posts on these and similar subjects, I'm bound to rank pretty well for a few at least and draw quality traffic over the long term.
So if you're a business person in this city and you have a blog, I recommend that you use this technique and see what comes up. There are bound to be some very promising searches for you to target in posts.
Another effective method of generating useful locally oriented blog posts is to interview a local business person in your field (being sure to link to their URL, of course). Choose the right people, ask them relevant questions and you will get some insightful, unique content that often ranks well.
And be sure to include relevant keywords in your post title, eg: "Being a social media manager in Perth: Interview with Joe Bloggs". It helps if you include their business name in the title -- or at least high up in the post, giving it more prominence SEO-wise. That way you may well end up on page one for searches for the term. Not only will you draw some quality traffic to your blog as a result but it will help them too, since people will see that they are worthy of an interview by a local blogger.