In Paris, France, what define how much street space can a restaurant occupy?

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According to the document Reglement des etalages et terrasses, page 15, such installations may not exceed 50% of the usable area of the sidewalk, and must leave a contiguous area of at least 1.6 meters in width for pedestrian traffic:

Les installations peuvent être autorisées, soit d’un seul tenant, soit scindées, sans pouvoir excéder 50% de la largeur utile du trottoir. Une zone contiguë d’au moins 1,60 mètre de largeur doit être réservée à la circulation des piétons.

If you are interested in looking directly at the laws concerned, these can be found at the beginning of the same document:

Les dispositions du présent règlement sont établies en application des articles L.2122-1 à L.2122-3 du code général de la Propriété des personnes publiques, L.2512-13, L.2512-14 et L.2213-6 du code général des Collectivités territoriales et de l’article L.113-2 du code de la Voirie routière.

Roughly translated, that means that the rules described in the present document are established by application of the articles L.2122-1 through L.2122-3 of the "general code of property of public persons", L.2512-13, L.2512-14 and L.2213-6 of the "general code of territorial collectivities" and of article L.113-2 of the highway code.

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