It could be a few things. The two most simple things that come to my mind are either fleas or food. Even though he didn't itch it while you're there, it could be fleas. Especially living near other dogs. But the first thing that came to my mind was food. My dog used to have that happen to him once in a while. He would just chew and chew at his hind right around his tail. Once we stopped giving him food with corn in it, it never happened again. I'm sure they are feeding them cheap corn based food there.
That picture of his back looks like either current fleas or a recent flea infestation, which is likely. I think food is unlikely. Make sure you keep up with flea meds. He could also probably benefit from a nice oatmeal bath.