There are two sources of regulation that would normally cover this situation. The first is zoning. Zoning laws dictate what properties in a specified location may be used for. A typical zoning designation is SR (or sometimes RS), which means single-family residential. In an SR zone, you should not be able to convert a residence to any kind of commercial or retail use. It sounds to me like the property you are referring to has been converted to a commercial or retail use because they’ve put in a parking lot. Under normal circumstances converting a single-family residence to commercial or retail use would be in violation of zoning laws. Zoning is regulated and enforced by city government. You should contact your city’s zoning enforcement administration. The only way to legally convert a usage within a zone would be by obtaining a zoning variance from the city.
The other way to regulate usage within a residential area is by the recording of Conditions, Covenants, and Restrictions (CCRs) at the time of development of a residential subdivision. CCRs dictate not only usages within a subdivision, but appearances of properties. Some CCRs even stipulate what exterior colors may be used for homes within the subdivision and what roofing materials may be used. CCRs are recorded against the lots of a subdivision to protect property values. Typical CCRs would normally forbid a residential property owner within the subdivision from engaging in any kind of commercial activity, especially if it involved high traffic activities like selling goods out of the residence. You can obtain a copy of the CCRs recorded on any subdivision from a local title and escrow company. CCRs are normally enforced by the developer or homeowner’s association of the subdivision.