The Sewer (Also known as the Grate) is a home place where Red, Yellow & other bugs live in Season 1.
Until in Wild Wild World, Red and Yellow grow wings & fly away from the sewer. In Welcome Larva!, they went to the house, then generally everyone else goes to the house, also. There are many things in the sewer, mostly sausages that Red & Yellow eat. There is also a matches box that Red and Yellow sleep on.
Bee and others with wings don't have to live in the grate, but they do.
As seen in Wild Wild World, the grate is in New York.