Neighborhood Security Act - Directs the Secretary of Health and Human Services to award grants to qualified entities for the establishment of demonstration projects designed to determine the effectiveness of certain activities by community residents in coordination with local police in preventing and removing violent crime and drug trafficking from the community, increasing economic development in the community, and preventing or ending retaliation by perpetrators of crime against community residents.

Sets forth provisions regarding: (1) the period of grant awards; (2) limits on grant amounts; (3) reductions in awards; and (4) unused portion of grant funds.

Establishes application requirements, including: (1) an agreement with the local police department to coordinate and assist in the prevention and removal of violent crime and drug trafficking in the target community; (2) a plan detailing the nature and extent of coordination and assistance to be provided by such department, project participants, and the applicant; and (3) a description of the strategy of the community for the physical and economic development of the community.

Sets forth provisions regarding: (1) criteria in considering applications; (2) preferences to specified applicants; and (3) approval procedures.

Includes among eligible activities under grants awarded under this Act certain: (1) citizen patrols; (2) block watch activities; (3) property modification programs; (4) squatter eviction programs; (5) expansion of community liaisons with the police; and (6) development and expansion of programs to prevent or end retaliation by perpetrators of crime against project participants.

Grants each organization authorized to conduct a demonstration project exclusive authority over the administration of the project, except that the Secretary may prescribe necessary regulations to ensure compliance with approved applications and this Act.

Requires the Secretary to monitor grantees to ensure that the projects conducted under the grants are being carried out in accordance with this Act. Sets forth provisions regarding withholding, termination, or recapture of funds, as well as complaints, reports, and auditing requirements.

Directs the Secretary to enter into a contract with an independent research organization to evaluate demonstration projects, individually and as a group. Sets forth provisions regarding research questions, funding, and reporting requirements.

Authorizes appropriations.