Does the city ban other types of yard signs? Campaign signs, perhaps? I've seen those types of signs all over and can't imagine that anyone would be persecuted for putting one in their yard. In the USSR perhaps. Communist China, perhaps. But in the United States of America? I truly believe we're entering the end times. If not the biblical and times then the end times for this country.
Probably any other public meeting signs in front of home residences.
What they do this for is they don't want a church opening in a public residence, or perhaps a school. They could remove the sign and meet in the-same place less formally. like the boy Scouts do.
If someone else is allowed to do this there with something other than a Christian church ,Lets say a mosque , then you have case in fact they could sue. . But I doubt they do.