Choose one of the following civilizations (others cannot have customized Home Cities): British, Dutch, French, Germans, Ottomans, Portuguese, Russians & Spanish
After levelling your Home City in Multiplayer/Skirmish you will unlock points to customize the appearance of your Home City.
Win 1 or 2 matches and then click Home City on the main menu, then Customize. Your available points will be shown in the bottom left.
Then select any item you want to unlock by Left Clicking on it then select Unlock and Apply. Done