Wash clothes in city below (7)
I believe the answer is:
launder
'wash clothes' is the definition.
(I've seen this before)
'city below' is the wordplay.
'city' becomes 'LA' (Los Angeles).
'below' becomes 'under' (synonyms).
'la'+'under'='LAUNDER'
'in' acts as a link.
(Other definitions for launder that I've seen before include "address the filth in lucre?" , "Trough" , "Convert illegal funds into legal ones" , "Wash, starch and iron" , "Perhaps decriminalise" .)