Even if he doesn't have a HOA, there are some cities that have regulations that cover nonfunctioning cars also. We have some around here that are like that. It is true that it's your property, but you still have to comply with all local and federal laws while on it. Its kind of along the same lines that you couldn't bulldoze your house and build an industrial factory or dig up the front yard for a giant oil well.

I understand the intent, they're trying to keep the front of people's houses from looking like a junkyard. I think everyone's seen a house with multiple broke down cars out front sitting on jack stands for 10 years, and that's exactly what they're trying to avoid. I would definitely check into local laws, but I think it is unlikely that they're just making it up.