This is something I've been wondering about (and hoping to see more of) for a long time: local social networks, functioning at the neighborhood level, which reflect real communities. That's the idea behind Neighbortree.com, a "free neighborhood website" which allows users to create their own neighborhood social networks, and businesses to deliver hyper-local targeted advertising.
True, there have been neighborhood discussion boards for a while, but as far as I know, these have been custom-built projects which are difficult to scale. They may also be subject to aggressive moderation or policing by interested parties. Neighbortree offers a potential solution to the problem of scale with its off-the-shelf social network technology, including templates with a range of options for user profiles, comments and moderation, and privacy settings. Neutrality is also an important part of its mission, as highlighted by the disclaimer: "We are not your Home Owners Association's website."
Neighbortree says the site is intended to facilitate the creation of user-managed online communities which allow residents to share content, chat, buy and sell goods and services, make announcements, and debate neighborhood issues (I'm imagining it as a safe virtual forum for discussions about, say, excessive use of lawn ornaments which might otherwise come to blows). Features include news and announcements, forums, calendars, photo albums, polling, messaging, and community newsletters.
On the advertising front, Neighbortree is probably about as local as you can get with ad targeting, short of delivering ads to GPS-enabled mobile devices, allowing advertisers to target individual neighborhoods as well as zip codes, metro areas or states. In a nice twist on the social network ad model, Neighbortree will share advertising revenue with neighborhoods on the site, and it will also try to raise funds from local businesses for each neighborhood. These funds could be used for improvements, block parties, or mini-scholarships for neighborhood kids.