Old previously-largely-forgotten interview with Mikami Shinji surfaced recently. Here's the gist of it:

"Raccoon City" of BIOHAZARD franchise is actually Allentown, Pennsylvania. Straight up.

Mikami personally visited US in 1991 and happened to be passing through the cities of Allentown and Fogelsville on his trip to Pittsburgh/Pennsylvania State proper. He also stopped at "Yocco's Hot Dogs" cafe at some point, while he was in Fogelsville. The diner place from the very beginning of Claire Redfield's FMV OP sequence in vanilla RE 2 was directly inspired by Yocco's in Fogelsville, it's interior was copied almost verbatim and some of the exterior elements were as well.

To be precise, "Raccoon City" as Shinji Mikami himself envisioned it, is an amalgamated combination of Allentown (80%), Pittsburgh (16%) and Fogelsville (4%). If anything, the "neighboring village" of Stoneville (unrelated to real Stoneville in North Carolina) could be technically actually inspired by Fogelsville as well (since it's a suburb of Allentown and Stoneville is "a suburb of Raccoon").

Allentown's population density, size of it's area, topology and elevation of premises, infrastructure and nature, all nearly completely match Raccoon city's classical maps, it's area's visual depictions in supplementary art, and it's descriptions in related media (such as books/novels/manuals/guides/etc). Allentown IS "Raccoon City", albeit being slightly juiced on steroids since Mikami wanted some Umbrella labs/factories + parks and a zoo in it (the zoo was later implemented in Outbreak games).