It is humans that live in cities. All the non humans, the mythical creatures live elsewhere.
Most Dungeon and Dragons campaign worlds that have elves and cities have elven cities. Warhammer has elven cities. Even Dragon Age had elven cities before the humans destroyed them. I’m having trouble thinking of any mainstream fantasy examples of elves who don’t and never have lived in cities. Maybe some tiny jrpgs where there a handful of cities on the entire world map. And dwarves stereotypically live in cities - it’s only in settings that deliberately go against the standard fantasy conventions that they don’t.
Elven cities typically don’t look like human cities, but have their own architectural style which may or may not involve tree houses. They’re still cities.