All static asset files/directories need to be listed in the angular-cli.json file.

Adding assets

To add your assets you can either:

• Put your image file in the default assets folder (which is already listed in the angular-cli.json file.
• Or add a new directory inside of app/ (e.g. in your case you could use app/images, and then reference that in angular-cli.json)

angular-cli.json:

{
  "apps": [
    {
      "root": "src",
      "outDir": "dist",
      "assets": [
        "assets",
        "favicon.ico",
        "images"
      ]
    }
  ]
}

Referencing files

Like @jali-ai mentioned in the comments background-url should be background-image and you can refer to your asset like this:

.image {
   background-image: url('images/image.png'); 
}

Here is an example of the angular-cli.json file and a reference to an asset