The logical advice is to ask a Rav if you are permitted to report this person. If it is halachicly permitted to call 311, let the homeowner know you will do so. You might also want to let the renter know you are doing the same. The landlord will be responsible for the use of the building for commercial purposes it wasnt zoned for, but the one running the playgroup is probably not licensed either and would likely get into trouble. Certainly the apartment is not suited for a daycare center and the one running it would be in trouble.
If you have nothing to worry about, all the screaming of the neighbor wont “smear” your good name. Especially if the neighbors agree with you and are willing to back you up. If she calls you a moser, so what, if you have a psak from your Rav that it is not mesira, who cares what the neighbor says.