I believe the Gemara about dog-owners being posul l’eidus has to do with people who own vicious / dangerous dogs. If you raise Doberman Pinschers you’ve got problems. I love dogs, but I’m petrified of Dobermans because one tried to stalk me on a dark street one evening. Great Danes, on the other hand, are huge, but act like overgrown puppies half the time.
So it depends on what breed of dog and the particular dog. Stay away from Dobermans, Rottweilers, pit bulls and other nasty types. Stick with retrievers, collies, and other friendly breeds and mixes, and your neighbors won’t have to be afraid.