> And by the principles of “small government” and subsidiarity, the HOA is tasked with establishing rules and guidelines that help make good neighbors live in harmony, such as uniform aesthetics, prohibited activities, and so forth. These rules are otherwise handled by landlords or municipal codes.

The trouble here is that the principle of subsidiarity doesn't lead to the HOA making these decisions from both ends.

For many of them the HOA isn't local enough and the decision should be up to the individual property owners, e.g. they should have nothing to say about you putting solar panels on your roof or operating a business that isn't meaningfully disruptive to the neighbors.

For the others, the rules have regional/national implications for things like housing affordability and small business viability and the HOA is subject to perverse incentives. Each suburb wants a different one to host the strip mall, with the result that there is an insufficiency of land zoned for dense construction and mixed use, and then it requires a higher level of government to act because too many of the local ones refuse to allow any at all.