I'd start by duplicating the layer, then masking out the tree in the foreground, replacing the hole with a couple of solids to simulate the sky, and then precomping the whole thing. In the main comp, scale it way down, reposition it and add additional masking to taste.
Do you perhaps know of a video that does something similar?
I think you are wanting to recreate the visual effect you get when you dolly a camera in or out and zoom at the same time to keep the same frame size. This changes the perspective in the shot and looks kind of odd. This is hard to do with a still image because you can't really change the parallax or perspective. You can use distortion effects to change the ratios but you won't get the strange things that happen to things like the space between the first and second building without separating your image into a bunch of masked layers and moving the camera through the shot. That would be really difficult to do effectively with a single image. I would try something like Mesh Warp or Liquify and set only two keyframes. More than that would be nearly impossible to manage with that kind of distortion. It is going to be extremely difficult to keep the image from going all wavy.
The only other options I can think of requires the purchase of 3rd party plug-ins for morphing between layer shapes or using the image for a texture in a 3D app and then distorting the plane. Projecting mapping may be the easiest solution. Unfortunately there is no click here solution to your problem.
I gave a picture as an example but I have a video segment. The camera does
not move but people and cars do and my actor. I need the street to be
stretched into the distance and into that I will add the actor walking
towards the camera. The actor himself will be shot on green screen.
Maybe this makes it easier for you to help me?
The effect you mentioned requires camra movement and is mostly used as a sort of time pause slow motion thing.
I want the people and cars to move along the street normally in time but make the image itself stretch and distort towards a certain point. I dont care what program to use. After Effects or Premier or whatever else as long as i get this done.
You can do everything kind of that you want to do with a video like the one that you posted but the distortion is going to be very difficult. The easiest way that I can see to do that is in a 3D app where you use the video as a projection map on a surface and then you distort the surface by selecting a vanishing point and pulling that back. This will kind of distort the video in the same way you are describing. What you are describing is best done in camera while you are shooting. You would put the camera on a dolly track, then dolly back and zoom in at the same time to keep the edge of the frame constant. This gives the strange sensation of the perspective changing and the background zooming into infinity. Perspective is controlled by camera position not the focal length so the easiest way to fake that is to project the video on a mesh and distort the mesh.
You could accomplish the same thing using Mesh Warp but it is very difficult to move the lines and tangents so that you don't get wavy lines. You could also do the same thing with a displacement map but creating the gradient would be very difficult because the gradient would have to go for 50% of a color value to 100% of a color value to move the pixels in one direction and the inverse or 100% of a color value to 50% of a color value in the other direction to create the effect of stretching the perspective. You would also have to pick another color for the top and bottom. For example a gradient that had red at 50% on the right and red at 100% in the middle then making a hard line the opposite of red or minus red at 100% at the middle and 50% minus red at the left edge could be used to distort the image smoothly from no stretch on the edges to maximum compression in the middle where the two colors meet. Here again, the hard part is creating the gradient so that it moves the pixels in the way you want them to move.
As I said before there is NO click here and get the effect you want solution for this problem. You are talking about a very advanced displacement requiring a real good understanding of perspective and distortion or displacement techniques.