In the past year, California homeowners have been hit hard with many facing foreclosures due to mortgage loan practices. The Legislature passed and the Governor signed into law legislation protecting both homeowners and homebuyers: SB 223 (Machado) making it a crime for licensed appraisers to engage in any appraisal activity that is connected to the purchase, sale, transfer, financing or development of property if their compensation is impacted by the final price generated by the appraisal; and SB 385 (Machado) permitting state agencies involved with residential mortgage lending and brokering to adopt emergency measures and new policies to ensure that all mortgage lenders and brokers are subject to federal guidelines on non-traditional mortgages. This law impacts the Department of Financial Institutions, the Department of Corporations and the Department of Real Estate.

Other significant housing legislation that were enacted included: SB 2 (Cedillo) requiring cities and counties to identify in their housing elements zones where emergency shelters are allowed as a permitted use without a conditional use permit or other discretionary permit; SB 198 (Battin) expanding the definition of a homeless youth in order to allow an unemancipated minor who meets specified criteria to stay at emergency, transitional or permanent housing; SB 528 (Aanestad) prohibiting the board of a common interest development from discussing and taking action on items at a non-emergency meeting that are not on the agenda and requires meeting notices to include the agenda for the meeting; SB 586 (Dutton) allocating the $100 million Affordable Housing Innovation Fund created by the Housing and Emergency Shelter Trust Fund Act of 2006 (Proposition 1C); SB 707 (Ducheny) allowing the Department of Housing and Community Development or the California Housing Finance Authority when requested by a borrower, to extend and alter the terms of existing loans made under specified older financial assistance programs; SB 753 (Correa) making state funds available to the owners of manufactured homes and mobilehomes to purchase their homes as well as the land beneath those homes; AB 339 (Cook) requiring an escrow agent to hold funds in escrow upon receiving a written notice by a party to the sale of a manufactured home or mobilehome, as specified, which requests for the funds to be held in escrow; AB 446 (Soto) requiring the management of mobilehome park to provide a homeowner with notice specifying the reasons a mobilehome must be removed from a park upon resale; AB 607 (Brownley) requiring all residential hotels to provide a locking mailbox for each unit by July 1, 2008; AB 715 (Laird) phasing in requirements that water closets and water-using urinals have lower flush volumes, requiring manufacturers to produce an increasing percentage of high-efficiency models until 2014 when all new water closets and urinals would have to meet the high-efficiency definition; AB 763 (Saldana) enhancing the condominium conversion notice process; AB 839 (Emmerson) adding National Guard members to the list of military services who would be exempt from having to renew their real estate license while serving on active duty; AB 840 (Emmerson) enhancing the suspension and revocation of a real estate licensee; AB 927 (Saldana) requiring that the proportion of Multifamily Housing Program funds expended to senior citizen housing units be proportional to the percentage of lower income renter households in the state that are lower income elderly renter households; AB 929 (Runner) increasing the amount of debt the California Housing Finance Agency may have outstanding by $2 billion; AB 976 (Calderon) regulating inquiries and reporting by landlords regarding the immigration or citizenship status of tenants or occupants; AB 980 (Calderon) requiring the seller of residential property to provide an additional disclosure statement notifying the buyer about any transfer fee, the amount, recipients, purpose, and expiration of the fee; AB 987 (Jones) requiring a redevelopment agency to make certain changes as to the monitoring and recording of affordability covenants and gives persons directly affected by a breach standing to enforce affordability covenants; AB 1019 (Blakeslee) creating a process for the reallocation of a county's share of the regional housing need when the annexation of an unincorporated area into a city occurs; AB 1053 (Nunez) allowing Business Improvement Districts to be an "eligible joint applicant" for receipt of funds provided under the $850 million Regional Planning, Housing, and Infill Incentive Account, created by Proposition 1C; AB 1153 (Garcia) requiring that manufacturers, distributors, dealers and sellers of manufactured homes, mobilehomes, and commercial coaches who apply for an occupational license must submit to a criminal background check; AB 1460 (Saldana) requiring the Department of Housing and Community Development to award priority points for projects that incorporate particular sustainable building methods and are seeking Proposition 1C funding from the Multifamily Housing Program; and AB 1560 (Huffman) requiring the California Energy Commission to develop regulations in order to add water conservation design standards to the existing energy conservation design standards for new residential and new nonresidential buildings.

Vetoed significant housing legislation included: SB 226 (Negrete McLeod) repealing and recasting the existing law pertaining to the conditions that must be met prior to issuance of an original real estate broker's license; AB 414 (Jones) restricting the use of double-zoned sites to accommodate a city or county's share of the regional housing need under housing element law; AB 548 (Levine) requiring owners of multifamily dwellings to arrange for recycling services; AB 665 (DeSaulnier) enhancing growth management planning and strategies; AB 709 (Keene) preventing public agencies from discriminating against appraisers based on membership in any particular appraisal organization; AB 864 (Davis) requiring the buyers of substandard properties to provide identifying information and a rehabilitation plan to the local code enforcement agency; AB 1058 (Laird) creating the Green Building Standards Law for new residential buildings; AB 1091 (Bass) expanding the distance requirement between eligible projects and transit stations for the Transit-Oriented Development Implementation Program from one-quarter mile to one-half mile; and AB 1542 (Evans) maintaining local rent control on lots that are not purchased by residents within a mobilehome park that converts to resident housing.