Use three-dimensional objects that suggest a street setting. Your audience will get the impression they're looking at an outdoor street scene if they see familiar objects, such as street lamps, roadside benches, signs and cultured vegetation (like neatly trimmed curbside shrubbery for residential streets).
Make backdrops with house and building fronts. Depending on your budget and how much lumber you have to work with, you might build a well-developed three-dimensional building facade with features like opening doors and windows or porch steps the actors can walk on, or simply paint the image of the building front directly on the backdrop. Either way, create the fronts at a life-size scale.
Paint the set floor to suggest pavement or cobblestones. Make one rectangular cardboard pattern for bricks or several of different sizes. Sketch each brick or stone individually and paint first the "mortar" between the bricks, then the inside of each brick or stone. Create stone texture by layering two similar shades of paint (lighter, followed by darker) and applying the second layer using a sponge.
Create an image of a street running into the distance at the edge of the backdrop. Run the painted set floor design mostly parallel to the edge of the stage, but make it turn upstage on either the stage-right or stage-left side. Paint the floor up to the edge of the backdrop, then continue the same colors and pattern onto the backdrop, narrowing into a perspective drawing of a street to create the illusion of the street stretching off into the distance.