How does google automatically create 3D cityscapes?
They basically use 3D reconstruction based on ground and sometimes aerial footage of places, generally using stereo cameras. With this footage, they build a 3D point cloud based on the images to do the reconstruction (which is particularly trivial for a stereo setup). 

I was told that if the reconstruction isn't good enough for more important/well known landmarks, they will have someone create a better 3D model in some CAD software. But I do think most of what they have, impressively, is done algorithmically based on 3D point clouds and potentially some other things I am unaware of (homographies maybe?).