This background is one of the first to be seen in Phantasy Star. The more wealthy Palman cities all have a look like this one, filled with rows of domed houses, vibrant shrubbery, and smooth walkways. In the far distance, a wall surrounds the residential area, providing protection from wandering bands of wild animals and undead monsters.
These colorful graphics were extremely advanced for their time, but also used a lot of memory. To reduce the size - and make room for more graphics - the developers used a mirroring technique. This method can be easily spotted here, thanks to the symmetry it provides.