ASBI Pocket Beit Midrash: Aruch HaShulhan, Laws of Synagogue 150:6

One who raises his home above teh synagogue some say he can be forced to lower it. However, it is explicit in Rashi that, before the fact, we prevent him from building however after the fact we do not make him lower his building. And our master the Rema (in paragraph 3) writes that if his home is only above a portion of the synagogue it is ok. That is to say that even if his home was not over teh entire synagouge but was only over a portion it is permissible. And this is the case specifically with the actual building such as an attic or roof. But to stick a pillar that extends high is not effective. And it seems to me that for this reason most of our synagogues are built with the tallest part in the middle rather than built so that the peak hight extends across all of it.

And you should know that this rule does not pertain to batei midrash. And that is the custom, synagogues are built tall and not batei midrash. And even though we maintain that the sanctity of a beit midrash is greater than the sanctity of a synagogue (as Rabbi Yehoshua ben Levi teaches in Megillah 27a), nonetheless, for this matter, since a synagogue is a place of prayer for the entire city, it has a more strict rule for the sense of holiness is perceived more in the synagogue than in the beit midrash. As scripture says, "and you shall gather in the house of my prayers."

And regarding that which the Rema wrote in Paragraph 2 that under exigent circumstances or where permission to build tall synagogues is not granted, one can pray in a home even if people live in the attic above the prayer space and this is only if people act with cleanliness in the attic above the prayer space. Until here is the Rema. See too Magen Avraham paragraph 2 and the Eliyah Rabah. And now that we have many tall buildings our practice is not to be concerned about this.