Does hosting location make a difference in ranking local sites?

Another question. Searched but couldn't find anything.

I'm setting up two new sites that will be targeting local consumers. One is EMD and other is not.

My question is regarding where the site is hosted. Would it make a difference as far as SEO and ranking the site in G! goes?

Is it recommended to get hosting in the same city if possible?

Any suggestions or experiences would be appreciated!