More choice within that city for all parties involved. The HOA to decide to allow or not, and those looking for places to live to find ones that match their preference.

I think this is always the main motivation of replacing one-size-fits all government policy with the ability of smaller components governments to decide on their own, for any political issue.

The mini-governments could enact policy that meets the demand of constituent groups within a small corner of the larger entity, vs being forced to follow a "majority" position mandated city-wide that does not match minority preferences.