Benedict lives in a small monastery in the grounds of the Vatican City - not in the main Vatican itself. Given that he was the first Pope to voluntarily resign office since the 15th century, it's a fairly unusual situation. Given that his renunciation of the Papacy was owing to his genuine feeling that he felt unable to cope with the demands of the job, I can't see his presence in the Vatican City as any kind of threat to anything.

I'm not a religious person in any shpe or form, but I somehow can't see the presence of an ailing, 91-year old ex-Pope in the City as worrisome.