Not much information is given on the Silver City. However, Lucifer passively mentions it in "Favorite Son", claiming that if Erwin Scoville (a security guard that was murdered) was not in Hell, he would be in the Silver City "enduring Uriel's welcome speech", something Lucifer deems "far worse than Hell."
It is currently unknown if "Silver city" is a synonym for Heaven or a city in heaven but it is likely one of the two.
After Amenadiel became the new God, he sat on the throne of the Silver City as his siblings all recognized him as their new Sovereign of Heaven.
In the show, Lucifer claims that Silver City is the alternative afterlife to Hell, implying that the city is located in Heaven. In the comics, however, it's mentioned that the city is only home to the Host of Heaven and that the city actually exists "outside the created order of things".