What is the right course of action now?

In this situation, the correct action is to reduce your speed. When driving on a city street with parked cars on both sides and a construction area ahead, you must be extra careful. There could be pedestrians stepping out between cars, workers appearing near the construction, or unexpected obstacles. Reducing speed allows you to react safely and stop if needed. Keeping the same speed or moving onto the parking strip would be unsafe and in most cases illegal. So, in urban situations with potential hazards or reduced visibility, it is important to slow down to increase safety for everyone.