Some low-budget filmmakers ignore this problem by shooting "guerrilla style." They eschew insurance and permits, and shoot only a few actors, on city streets or in malls, with a handheld camera. They hope that their cast and crew resemble tourists with a camera, and they'll thus be ignored by police and security guards.
(Note: In the 1980s, New York City only required a shooting permit if a filmmaker's equipment touched the ground. Filmmakers who avoided tripods, shooting everything handheld, did not need permits. I don't know what the law is now in NYC, or in other jurisdictions.)
Okay, so if you only have a few actors, and shoot handheld, you can use city streets without a permit. You'll have people and cars in the background, unrelated to your film, but provided they are too small or blurry to be identifiable, you generally face no legal problems. (But consult a lawyer on this.)
Location problem solved?
But what if you're shooting a period piece? Your story is set in the late 1800s. Sure, the cars and people in the background aren't identifiable, but ... they're cars! And the people are wearing modern clothing!
The Big Studios will simply obtain (and pay for) a shooting permit, and the off-duty police (more money) will kindly block off all streets so they can shoot their period film.
But what if a low-budget filmmaker can't afford that? How then to shoot a period piece on modern city streets?
One solution is a judicious use of framing.
Demon is a low-budget horror film (written and directed by Mark Duffield) set in Victorian London. Fortunately, London is full of old buildings that were around in Victorian times. But it's also full of modern cars and people. How to shoot the architecture, and not the modern population, without closing off the streets?
Duffield solved the problem by framing many street scenes at low angles, so we only see the upper parts of buildings.
At one point, Amy (Clare Langford) takes newcomer Lorcan (Andrew Mullan) on a tour of London. She shows him London Bridge. Today's bridge is normally full of cars, but a low-budget filmmaker can't afford shut down a major bridge. Erasing the cars through CGI effects might be cheaper, but still costly. Duffield simply frames the cars out of view.
Here are a couple of other scenes of Amy showing Lorcan the sights of London. Again, the shots are in low angle. Perhaps to avoid showing modern tourists or cars parked on the streets?
But this framing is not only pragmatic, in that it hides modern life. Demon's framing also serves an aesthetic function. Amy is showing Lorcan (and us, the viewer) the splendor of Imperial Britain's capital city, and he is duly impressed. The low angles effectively convey their emotional awe at the city's sights.
I use the term pragmatic aesthetics to describe whenever a filmmaker applies budgetary and technical compromises to aesthetic effect. This applies to Duffield's framing. He couldn't afford to close off London's streets, nor delete its modern life with CGI, so he framed to hide modern life -- even as his framing simultaneously supports the story, characters, and theme.
But it's not just low angles. Here's a tight shot of Lorcan from a high angle. The tight shot hems him in, so we don't see much beyond him (including modern life). The high angle likewise hides what's beyond him. Were the camera raised, we'd see more of the street, and perhaps some cars.
Then there's the below tight, straight-on angle shot of Lorcan. Again, we see little beyond him.
The staging also serves Demon's low budget. In both of the above shots, Lorcan is static. People walk past him. Pragmatically, this creates the impression of a bustling London street, filled with people -- but on the cheap. Had Lorcan walked along the street, the camera would have followed him, and more of the street would need to have been closed for filming.
The above two frames and staging also serve an aesthetic purpose. Lorcan is paralyzed with fear over the notion that he might be a hideous monster. The above images are from his nightmare. His static staging supports his emotional paralysis. And the tight framing conveys his feeling of being trapped in a very bad situation.
For more about framing, staging, and pragmatic aesthetics in horror films, see Horror Film Aesthetics: Creating the Visual Language of Fear. This blog represents a continuing discussion of my views on horror, picking up from where the book left off.