There are several issues that would pose serious problems to implementing a logoon in the inner city.

First let me say that YES it is feasible for a small community (12+) to do something like this.

Inner city issues:
Land. With lagoons and facultative ponds you do need a "bit" of land. The idea is to load them slowly which requires a larger surface area. Land within many cities is expensive. Even the "depressed" areas have high rents relative to rural lots. But if that can be overcome then you run into...

Public perception:
Many people don't want WWTP near them. Admittedly, I am guilty of not liking the smell too much either. My first year here, I live not even a mile from it. Most days you couldn't smell it, but there were days that even if the windows were closed and you had incense, it didn't matter.

Also, many people would fear pathogens. As humans we have bacteria and viruses in our systems. Those get excreted and make it into the WWTPs. There are some that would fear pathogens spreading...let's say by wind or other means. In reality at WWTPs, the operators have no higher incidence of disease than does tha average person. They DO have higher levles of antibodies.

My advisor was telling me a story about this facility in Japan. Since they have such limited sapce, they had to consturct a giant WWTP. It left such a alrge footprint that they had to use their creativity. They built a park, some office buildings and a recreation center on top of the plant. He said there was no smell at all. He said unless told you would never know that a plant was under your feet.

IT CAN be done, but it would take a lot of work, not only stopping the inertia of misconceptions, but also the unity of the community.