The Outer wall is a barrier against the dangers from outside the city. In its shadows is another barrier, one from hope, comfort, and warmth.
Sky street (and the blocks around it) are odd. The shadows are darker. The air is damper. The mood is bleak and errie. The street is silent, all the noise muted somehow. However, you can always seem to hear someone crying.
Everyone has to live and work somewhere.
The street is wide, and smoothly paved, with trees planted along the sides. The houses are mansions and palaces, each surrounded by stone and ironwork walls that are as much decorative as they are protective. These are the summer homes of the Princesses, and ladies of privelage.
Animals have parasites and diseases, so do plants, there are even bacteria that cann dissolve oil spills or plastic or what have you - why couldn't there be a disease living off magic - a magic item could be infected, losing power and speading the plague to other equipment it contacts, while a magic user would slowly lose his powers and contaminate all he works with or casts a spell at...