"Do you live near here?"
Translation:¿Vives cerca de aquí?
The de is required here because cerca de = close to, near, when there is an object of the preposition or place mentioned after it:
Cerca de mi casa = near my house, close to my house.
Cerca de la escuela = near the school, close to the school.
Cerca de aquí = near here, close to here.
Cerca can be used without the de when there is no object.
Vivo cerca. I live nearby.
El parque está cerca. = the park is close, nearby.
the correct answer shows "do you live" as viven. I put vives and the next time they have "ustedes viven cerca de aqui"
Cerca is an adverb, so if you want to use it before a noun (or a pronoun) you have to add de.