Since you live in a city, you don't have much choice about exercising him on pavement - lots of pavement in a city, and not much unpaved areas.
However, as you have discovered, pavement can be tough on paw pads.
I must disagree about keeping your dog's pads in a soft condition.
A properly conditioned pad will feel like very rough leather, but will not show any cracks. Generally speaking, a dog's pads will toughen up sufficiently for normal activity with every-day use. However in some cases and before very intense activities, you may have to help it along with a pad conditioner. Notice I said a pad conditioner, not a pad softener. You do NOT want to soften you dogs pads.
Some well known pad conditioners are Pad-Heal (which we use a lot), Tuf-Foot, and Pad-Tough. Whichever one you use, follow the instructions exactly.
Another product you can use is a paw wax, such as Musher's Secret. These don't really toughen the pads but they do protect them somewhat from cracking. One application will last a few days to a week.
As for running or walking on pavement being tough on joints, it depends on the pavement material. Medium-hard surfaces such as blacktop pavement, boardwalks, or RAC are not all that bad. On the other hand, a very hard surface like untreated concrete can be tough.
Actually, running/walking on a very soft or very yielding surface, such as a very soft beach sand, is much tougher on joints than any medium-hard surface, as anyone who has trained by jogging on a beach can tell you.
Of course, the best surface for running or walking is one that is both firm and resilient, such as rolled grass, packed sand, or similar artificial surfaces, and is also relatively level. But you may have some trouble finding that in a city. Often the only place that qualifies is your local high school running track, and dogs are generally not welcome there.