Porn ruins families by destroying the sense of true intimacy and acceptance between husband and wife. That, of course, will impact the children - kids learn what they see live.
Neighborhoods that have allowed establishments that sell porn, sex toys, etc. and those that have allowed topless 'juice bars' and the like generally attract only more of that same type of business to the area, thus affecting the immediate neighborhood, and ultimately the community at large.
Children are affected as I outlined above. I'm sure you aren't asking how kids are affected by kiddie porn, since that is so obvious, so I won't address that.