In Discourse groups are collections of users. Categories are collections of topics. You can use groups to control access to categories. It’s sort-of a bad idea to have hundreds of categories (tags are lighter weight), but it’s less-bad now than it was a while back.
You might use tags for the streets, perhaps having some tags muted by default.
Unless you want to control who can see other streets, you might not need to use group/category permissions to manage that.