Can I assume no business activity is allowed in a residential neighborhood?
In a residential neighborhood there are always people who work from their homes, that is, conduct business activities in their residentail neighborhood. These days we have what we call telecommuting, where some employees actually spend part or all of their working day or working week working from home. So it's not unusual to find people working at home, and it's not unlawful, in general, to be working from home or even conducting a business from home. However, there are generally some limitiations that will vary from city to city outlining what you can and can't do with regard to business activity in a residential neighbourhood. There may be traffic limitations, there may be limitations on the type of business. For example, you can't really conduct a retail store from home, and the reason, of course, is there would just be too much traffic flow and parking problems and it would just be unfair to the neighbors. You're going to need to look at the particular business activity being carried out by your neighbor to determine whether it's something that's permitted or not.