Can my putting a modestly sized addition on my house diminish the value of my neighbor's house assuming it matches the existing house?

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Given your categorization of this question, one must assume that you are both members of an association.

Associations are run according to governing documents. So long as your addition is added according to the process described in your governing documents, and it is allowed thereby, only your good will toward your neighbor would preclude completing the addition.

That is if you, your neighbor or a real estate professional believe that the addition is a detriment to your neighbor's real estate property.

It is possible that the addition would simply elevate the value of your property, while your neighbor's property would retain its original value.

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