But that's pretty much what that institution does. It might not seem that impressive because it's a neighborhood rather than a city- or state-level institution, but they've been going for decades and organize things like mural tours, regular cleaning and so on; I used to live in that neighborhood and remember as being very proactive about taking care of murals as a community resource, fostering young artists etc.

I think what happened here is the real estate management company viewed the murals as an encumbrance on the property (that would need some sort of negotiation or easement as a condition of resale) and decided to hire a contractor to make the problem go away, calculating that a fine (contractual or city-imposed) would be significantly less than the potential increase in sale value. I feel the contractor who painted it over is partly responsible morally, but legally and realistically such people are hired to do what they're told; asking questions about whether the right permits or agreements are in place for destruction of the artwork is a good way to get blacklisted by property management companies.

The property management industry seems weirdly hostile to any sort of public art. An infrastructural utility building near me had been decorated for years with ~15 mounted images by local artists highlighting interesting things about the geography and history of the area. A year ago the property manager had the entire building repainted in dull battleship gray (probably because it was cheaper than cleaning it), destroying all the artwork in the process. Now much of the building is covered in graffiti (mostly ugly low-effort tags), foot traffic along that street seems to have fallen, and perhaps not coincidentally there has been a rise in vehicle break-ins.