You run into the same challenge with social networking sites, dating sites etc.
There are two options:
1. Sample data, which doesnt provide much value but gives the impression of what the site will do.
2. Incentives, you can provided an incentive to build the system. Giving each subscriber some sort of value either in Money, credit or recognition on the site.
The best thing with these projects is to indeed start small. Focus on each city. If you are talking about strictly city data, you can at least populate your DB with some local facts to keep things a little more interesting than empty.
Dont like this issue discourage you.
Last, you can always have someone register before they are granted access to the full site. The first few hundred to register might be disappointed due to the lack of data once they are an active member, but they will be able to help you build your data.
I did a dating site once where you had to first register to view singles (helped fill up the db), and if you were the first 100 to register from your city, then you would have a FREE for Life account. The reason we did this is because we did not want bad reviews after the 1st client had registered in say "Miami" and could not find local matches.