City 17 is mostly based on Sofia, you can see a lot of Bulgarian signs in Half Life Alyx. Viktor Antonov designed it from his experience of communist (and later post Soviet) cities that were broken by lack of maintenance and useless megaprojects with no sense of community. It's not a vaguely European city.

Prague in DXMD is also broken, just by hate and social injustice instead of a brutal dictatorship. Makes sense that they look alike.