These days for doctors it has become problem for building a hospital, people around the site give complaint to municipality or corporation when you start constructing your hospital.
Complaint of the surrounding people is usually is result of some unjustifiable reasons. More often it is not related to hospital, it may be due to personal or professional jealousy.
Builder i.e. doctor of the hospital is usually called by municipal authorities and most often asked to convince with complainers and get it solved by dialogue. It is OK get it solved with dialogue but more often what happens is doctor is at major loss. This leads to usually break down of dialogue
I personally feel one should not involve politicians in these matter because it usually leads to loss and no big gain for doctors. At the same time never quarrel with neighbors because time is best healer.
Now let me come to main issue whether one can construct hospital in residential area. Why there should be problem for constructing hospital in residential area, after all hospital are meant for humans, keeping it away from humans makes no sense at all.
In Karnataka in INDIA there is no such rule for not constructing hospital in residential area. Then how the problem arises, this is because of our doctor negligence while taking municipality permission for constructing hospital. When one starts constructing hospital please take care to take permission from the municipality the way you wish to construct the hospital, more often what happen is permission is taken for heck of it, and building built is something different, this gives loop hole for municipality and neighbors to stop the construction, and not the hypothetical bar for constructing hospital in residential area.
For hospital proper parking and setbacks as per permission by municipality has to followed otherwise neighbors have best weapon to trouble you.
As for as possible do not take case to court by yourself show restrain, try to get it solved by municipality because in court civil cases take longer time and your dream project remains a dream.
If you feel that complainers may get Stay from court, then you first get CAVEAT so that stay becomes difficult for them. Please note CAVEAT duration to my knowledge is about 3 months check with lawyer and do not forget to renew it till you get your Completion certificate and you start functioning inside hospital.
I am little unsure of big hospital like corporate may have some restriction for construction in residential area.
Apart from building issues one has to follow strictly waste disposal technique, otherwise neighbors can create problem.
I think we can not treat quarantinable diseases in hospital of residential area.
Be bold, go ahead, and consult good lawyer, get your dream project completed, after all we doctors are not building night clubs and bars