First, you should realize that this is not you or your dog's problem. Don't blame on yourself or your dog. Dogs have different levels of energy and aggression, some of them are more territorial by (bad) training or by instinct.
If you're jumping in to someone's backyard, you don't expect their (let say) Guard dog -- whatever breed, doesn't really matter -- to come and play with you, right? Now if you'reyou let that dog walk freely inaround your block, then he is the Guard dog for the block. You can't tell a dog Look, this is our backyard but that is a sidewalk and it belongs to everyone.
So, what you need to do is to go and solve the problem. Again this is not your problem. It was literally caused by the other owners. Why? by not socializing their dogs properly. And if your dog is afraid of another dog approaching him while barking aggressively, then it's not his problem also. As I said dogs have different levels of energy and of course different characters.
I look at the situation like this: There are some loose dogs that they are not very well socialized by their owners. The solution: Socializing them. How? well, how did you do that for your dog? That should be pretty similar.
If I were you, I'd do the following:
- Introduce yourself: goGo to your neighbor's home without your dog. Let the dog see that you're in his place. Let him see you with his owner. Go and play with the dog. Simply: make a connection. Go and love that dog, don't hate him, he is not doing anything wrong deliberately and he can be so fun and loving within a second.
- Introduce the dog to your place and your dog: nowNow invite your neighbor to your place. Ask them to bring their dog as well -- preferably with the leash on. Dog won't be aggressive because it's a new place and -- based on the smells, it belongs to another dog. Now you take the dog and let your neighbor goes and make the connection. Let them play with your dog for even a few minutes, while you're holding their dog -- preferably touching him as well, and the dog also should be aware -- probably alerted, and see how his owner plays with your dog.
- Let them be friends: walkWalking is such an important activity to a dog --. At least from their point of view. Sometimes I think they like it even more than eating. Get one of the leashes in your right hand and the other one on your left hand. Start walking from your place -- preferably without your neighbor accompanying you, and also to the opposite side of your neighbor's place. After a few minutes change your direction towards your neighbor's place and end it up by let the dog goes to his place -- after finishing the walk and while your dog is still with you. You might want to have some small treats with yourself also.
I guess by that time, you will have a big-big improvement in both sides. Just don't you forget that: This lovely dog is not very well socialized, and I am going to help him to have a better life. We all deserve a good life. That's it.