It is a psalm of the sons of Korah
87:3 The psalm emphasizes the city of God as does Psalm 46:4 and 48:1, 2, 8, 8.

Notice the emphasis on those who were born in the city in 87:4, 5, 6. This city also clearly refers to a people who know God- 87:4

87:4 Rahab in this verse is tied to Egypt and proof of that word used is found in Isaiah 27:1; 51:9-11. God's people will include people from far away superpowers like Egypt and Babylon. God's people will include people from persistent enemies like the Philistines and trading powers like Tyre. Cush or Ethiopia was viewed as the most distant of nations and they will be among the inhabitants of Jerusalem.

87:5 The LXX speaks of Zion as "my mother" in Gal. 4:26 contrast the "the Jerusalem above" with "the present Jerusalem" in Gal. 4:25.

87:6 God will write down the name of the citizens of the city- Isa. 4:3; Ezek. 13:9

Book III of the Psalms (73-89) have often pictured Jerusalem in ruins after the 587 BC destruction. Notice especially Ps. 74:1-7 and Ps. 79:1-4. The physical Jerusalem was sometimes destroyed because of her sin, but the spiritual ideal of a city built by God still existed- Hebrews 11:10; 13:14.

Babel is a picture of men seeking to build a city without God- Gen. 11:1-9- in contrast to God's city build by Him for His people. Revelation 17-22 ends as a tale of two cities, contrasting Babylon the harlot with Jerusalem the bride.

Zion in the New Testament
Matt. 21:5
John 12:15
Romans 9:33; 11:26
Hebrews 12:22
I Peter 2:6 
Revelation 14:1