For a good explanation of Ambient occlusion refer to this link http://en.wikipedia.org/wiki/Ambient_occlusion

Start by creating a new Microstation dgn using the 3D seed file, and drawing a slab solid in Isometric view. Below I have drawn a slab solid 50m x 50m with a depth of 250mm.

Now using the draw on solid tool draw a rectangle in the middle of the slab solid, this can be any size you wish just draw it near the middle.

Now use the Solid by Extrusion tool to extrude the rectangle upwards by any height you prefer.

Use the draw on solid tool to draw a line across the top of the rectangle.

Then use the Modify Solid Entity tool to drag the line upwards creating a pitched roof.

Now go to Utilities > Render > Luxology and from the Render Setup tool select Ambient Occlusion and hit the render button.

You can add more buildings to you model and change various render settings to get different results as shown below. I will go into more detail in another post.