Legally, the one who owns the female is the breeder. It's your responsibility to either confine or spay her.
If loose/unfenced dogs are the norm in your area, and it sounds like they are, then you can't expect him to keep his dog at home when you don't keep your dogs at home. Your tied dogs in season are like leaving a giant raw steak on the lawn and then being mad that a dog comes over. His male dogs can't resist it and shouldn't be expected to.
Spaying is more than just throwing money away. An intact female is at an increasing risk of uterine infection and death with every heat cycle. That's why even show breeders, who will probably keep a male intact until he dies (because there's no health risk to an intact male) will spay their females at a reasonable age.
I guarantee you there's a program or a clinic near you. If you don't want to spend $100 on a spay, go spend $100 on a dog kennel.
I'm sorry - I know, you want the answer to be "Yeah! Bad neighbor!" But the owner of the uterus is responsible for the puppies; that's just the way it works. Even if you had a leash law, he'd only be responsible for violating the leash law, not responsible for the puppies.