That’s lovely that you’ve seen a hedgehog. I hope the dog left it alone.
Sorry to hear they are building nearby. One thing you might be able to do is make sure that when they build the houses, they include hedgehog highways – i.e. hog holes in garden fences/walls to link all the gardens. That would be a great help to any hogs that find their way back there.
It might have the opposite effect than you fear and you might even see more hogs in your garden, with a bit of luck. Fingers crossed.