The fate of cities under natural hazards depends not only on hazard intensity but also on the coupling of structural damage, a collective process that remains poorly understood. Here we show that urban structural damage exhibits phase-transition phenomena. As hazard intensity increases, the system can shift abruptly from a largely safe to a largely damaged state, analogous to a first-order phase transition in statistical physics. Higher diversity in the building portfolio smooths this transition, but multiscale damage clustering traps the system in an extended critical-like regime, analogous to a Griffiths phase, suppressing the emergence of a more predictable disordered (Gaussian) phase. These phenomenological patterns are interpreted through an effective random-field Ising model, with the external field, disorder strength, and temperature interpreted as the effective hazard demand, structural diversity, and modeling uncertainty, respectively. Applying this framework to real urban inventories reveals that widely used engineering modeling practices can shift urban damage patterns between synchronized and volatile regimes, systematically biasing exceedance-based risk metrics by up to 50% under moderate earthquakes ($M_w \approx 5.5$-$6.0$), equivalent to a several-fold gap in repair costs. This phase-aware description turns the collective behavior of civil infrastructure damage into actionable diagnostics for urban risk assessment and planning.

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