Make it bigger
How exactly do they plan to just automatically add more space to your house? Do they want you to tear everything down and then put a small room somewhere else so it matches the rest of the homes in the neighborhood? Of course, we assume they expect these people to pay for it.
Unless the homeowners association was willing to put out the money for a new room in the house, they might have gone along with it. But of course, they were not, they were just trying to enforce some silly rule that they adopted recently. They really think they have actual power.