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I don't generally care for HOAs, and you're right that rules shouldn't be made just to protect existing owners' property value.
A relatively new issue has been people buying houses to rent as airbnb/vrbo, which takes properties out of the available inventory for long term living, and raises the overall cost floor. Another one is big buyers like Zillow vacuuming up inventory and then algorithmically extracting more money when they sell, which also hurts the average person. Not sure if these issues were the primary driver in this case, but as described sounds like this HOA change would help.