Board Thread:Wiki Discussions and Support/@comment-142748-20141231093731/@comment-142748-20150101211841

Its not possible since its not mentioned in any other account other than Obito's. None of the characters mentioned the Uchiha living anywhere else, or even mentioned how strange it would have been for such a powerful clan to live on the outskirts. Itachi and Shisui's account, a first hand flashback would have mentioned discrimination and/or segregation while leading up to the massacre but...didn't. It was omitted for a simple reason: it wasn't correct.

Kishimoto had a trouble with show, don't tell when it came to the Uchiha's discrimination and seemed to take pains to show it didn't happen. He had plenty of opportunities backing Obito's account up but didn't take it.

I mention 'new construction' since Obito's account explicitly says that they were forcibly relocated. That the 'new' Uchiha District would be newly constructed. Again, no evidence was shown to show that was the case, so again, that is a lie Obito fabricated.

The segregation and discrimination was merely a lie Obito fabricated to get Sasuke to turn on Konoha and join him. And it worked since Sasuke didn't bother looking into it.