There are already neighbourhoods and cities like this. Do you know how many vegetable/fruits stands there are on the above street? Plus a couple of delis, a fish market, dry cleaners, four banks, a library, a BBQ joint, a couple of pizza parlors, pharmacies, dentists, optometrist, etc. The tram / street car tracks you see connect to a subway station.
Plus everyone on the residential side streets have a backyard, many have garages connected to lane way:
