Does a Garage need to fit an Actual Car?

At some point, the wall separating the Ballardia garage from the rest of the basement was removed, probably around the time the previous owner wrestled the enormous 1950’s freezer into the basement.

Instead of a wall and a door to the garage, a nailed-up piece of canvas could separate the basement from the garage (you can see the string hanging down in the picture).

Planning to put the wall back leaves us with a small dilemma. The stairway curves two directions at the bottom, one into the garage area, the other into the area we plan to finish. There is really no other path for the stairway to take.

On the garage side, we could either put a wall on the garage side of the stairs, or the utility room side of the stairs. If we put the wall on the utility room side of the stairs, then we’d have to go through the garage to get to the area I'm considering for utilites (laundry, furnace, etc), which seems wrong. If we put the wall on the garage side, the garage would not be large enough to accommodate anything other than perhaps a Smart.

After careful consideration and quality time with a tape measure, we will probably sacrifice the garage for the simple reason that the garage and driveway width is so narrow that any modern car, even my smallish Volvo, could only open the driver’s side door and would probably scrape the paint at that.