Yup, have you tried to talk to the restaurant owner? Do it as a group. You can't go alone. You need the backup of the other residents else it'll just look like you're the only one with a problem.

See if you can resolve this civilly. Point out that you are all neighbors after all. If he wants to be uncivil, remind him that you can also be uncivil neighbors. You can make it VERY hard for him to operate a business there.

For starters, you can collectively be annoying customers. Cannot study in your room? Study in his place. Buy the cheapest item available and camp there. Take up a table. Refuse to let anyone share, or be annoying to them if you are forced to (sneeze like mad without covering your mouth).

I can think of other cheeky things to do. After all, you have nothing to lose anymore but he has a business to run.

Of course, you should resort to official or other less questionable methods first. Police report, politicians, local council, etc. This 'you mess with me, I mess back with you' idea is only if you are getting desperate.