We’re not talking about a sewage treatment plant or even a data center, we’re talking about fellow members of our community living in code-compliant housing.
This includes zoning laws that protect incumbent property owners from loss of property value by massively changing the character of the surrounding properties.
As much as I would love to live in the free country you describe, it’s not the one we get to live in. And since that’s not the America that exists in reality, there is nothing wrong with people using these rules to protect themselves.
I would add that these aren’t one sided restrictions. They’re reciprocal. A typical property owner can’t convert their property to an eight-plex, and conversely, they can and should expect the same level of protection.
As much as America pretends to be all about pulling yourself up by your bootstraps it’s actually far more socialist than many would like to admit.