Close planting, under or over watering, and severe pruning can all stress a shrub like Arborvitae.
Your neighbors shrub almost looks like it has an evergreen bag worm problem, but I can’t be sure (they often defoliate a tree in that way). Could also be too wet by their foundation, or too shady... that’ll kill a lot of little ornamental evergreeens.
I’d guess you are seeing standard die off that just needs swept out and cleared by hand at the end of the season. I’d suggest feeding them this fall after clearing them of debris, and for now just wait and see.
Since you’re new to the house I’d also guess the previous owner had them pruned that shape with electric trimmers, which causes a single plane of green on the outside of a shrub and no green or light in the interior (not great but pretty standard practice with lawn care guys). Perhaps this caused a little added stress to the shrubs. Try not pruning at all, arborvitae have a lovely natural column shape.