We have neighbors behind us and it has not been a problem. We have very tall trees and shrubbery between the two homes, so there is a visual barrier. We really cannot see them, and rarely hear them. They do have their lanai enclosed, so that cuts down on sound. I can't see how it would be any different than, say, living in a courtyard villa with people behind you. My friends live in a villa, and the wall doesn't do much to cut down on sound, although it is nice for visual privacy. Everyone has their preferences regarding privacy. I personally would not want to back onto a street, as I don't like the sound of traffic when I'm on my lanai.
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