City with wet wash-house? (7)

I believe the answer is:

laundry

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'wash-house?' is the definition.
I can't judge whether this definition defines the answer.

'city with wet' is the wordplay.
'city' becomes 'LA' (Los Angeles).
'with wet' becomes 'undry' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'la'+'undry'='LAUNDRY'

Can you help me to learn more?

(Other definitions for laundry that I've seen before include "Items for wash" , "Where clothes are washed and ironed" , "Keep it clean!" , "Washing room" , "Dirty washing" .)

I've seen this clue in the Sydney Morning Herald.

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