You may not know this, but right next to you, right in your own home town, where you take your kids to school and buy your supper, evil is lurking. And not just any evil. Those foul-mouthed punks, that seemingly random violence, and even the the tiny annoyances of the ever-red traffic lights are all part of a supernatural movement that will, quite soon, erupt in demonic flames and fractured reality. But you'll never know it because also sitting next to you, in the guise of a mild-mannered street bum, is a supernatural hero with a hard-boiled past, who will sacrifice almost everything to keep you ignorant.
Welcome to Urban Fantasy.
It takes place in the real world, generally in some troubled city like Detroit or Cleveland, and features the epic battles of good and evil while most everyone notices that nothing unusual is happening. The reason that no one ever seems to notice this varies from the conspiracy of the magical world to keep itself hidden from mundane eyes to the simple reality that most mundanes wouldn't know a dragon if it stepped on their car. They would probably just blame the wreckage on some drunk kids speeding down the street. But the main reason that no one ever knows about this magical world is that the hero almost always wins to keep the bad evil from changing the world. And if he or she fails, a cover story can always be quickly fabricated.
So, the first step in writing an urban fantasy novel is to comb the newspapers for unusual events and then ask yourself, "What supernatural force could have caused this?" And then, "What happens next?"
But whatever you do, don't forget that urban fantasy must also be gritty, dark, and moderately depressed. Why? That's the fashion. It's also the atmosphere of "urban," that land of slums, garbage strikes, graffiti, and the homeless. But urban is also the land of museums, river festivals, parades, and major league ballparks. There should be some fertile ideas in those!