Redesigning streets for humans actually is an investment that will pay for itself in time. You could tax the restaurants for the patios, for example.

Since you take away heavy car traffic, the street will need less maintenance

Now that your street is nicely walkable, put some trees in, make it look nice, have restaurant and bar patios out, and you'll have much,uchore people visiting, making restaurants earn higher profits, making then also pay more taxes, again.