how would that work? what assets would Miami issue its citizens?
The city would bid STX (the currency of the Stacks blockchain that this protocol is built on) to acquire MIA (MiamiCoin), which you can deposit into certain smart contracts in order to earn STX bid by future bidders.
You can then deposit STX in a different smart contract to earn the same kind of passive revenue but in BTC.
So the whole premise of Miami residents getting passive income depends on there being ongoing bidding of STX to get MIA.
Miami businesses could, and are starting to, accept BTC and/or STX and/or MIA, which would further motivate further bidding in the process.
I just got my first payout of NYCcoin yesterday, and I've deposited it so as to generate passive income in STX, which I will use to bid on future NYCCoin issuances.
and how would that allow those citizens to make ends meet?
It wouldn't, not on its own anyway. It could just alleviate some tax burden and/or supplement their "active income" i.e. their revenue derived from actually working.
(edit: eventually, if this becomes common-place, it may be possible for a non-trivial portion of even the middle class to live mostly off of their passive income)