Mrs. Figg did not live next door to Harry Potter; she lived two streets away.
"Every year on Dudley's birthday, his parents took him and a friend out for the day, to adventure parks, hamburger restaurants, or the movies. Every year, Harry was left behind with Mrs. Figg, a mad old lady who lived two streets away. Harry hated it there. The whole house smelled of cabbage and Mrs. Figg made him look at photographs of all the cats she'd ever owned."
Book 1 p11