SAN LUIS OBISPO, Calif. – Surging new home construction and rising homeowner equity are creating more than green yards for San Luis Obispo County landscapers.
Orders for new outdoor projects have grown dramatically in the past few years. Many of the county's landscape architects and contractors say revenues and profits are up substantially, and they are hiring more staff to handle back orders stretching out six months.
That's not unusual during housing booms, said Larry Rohlfes, assistant executive director for the California Landscape Contractors Association.
"When homebuilding is going great guns, we are going to be going great guns too, although usually about six months later," he said. "There is definitely a connection."
Nationally, the American Nursery & Landscape Association reports expenditures for landscaping installation and services doubled to $29 billion from 1997 to 2002. U.S. households also spent an additional $39.6 billion at retail nurseries and garden centers in 2002.
The nursery and greenhouse industry is one of the fastest-growing segments of U.S. agriculture, with grower receipts increasing about $500 million annually. It's also the third most valuable crop produced in the state and in San Luis Obispo County, where it was valued at $91.5 million last year.
New home construction accounts for a lot of that growth. In the past year alone, the number of new homes built in San Luis Obispo County jumped 13 percent to 2,220 units, the highest level in more than a decade, according to the Home Builders Association of the Central Coast.
Those new homes need landscaping. Even if builders install plants and irrigation systems, most homeowners will add features, such as patios and decks. That investment can easily add 10 to 20 percent to the value of a home, according to industry estimates.
The explosion of new landscaping and the work of maintaining it are creating demand for additional employees as well. Landscape jobs that pay $8 to $10 per hour for maintenance workers and $20 per hour or more for installation specialists and supervisors are expected to increase almost 20 percent -- from 1,110 jobs in 2001 to 1,330 by 2008, according to the most recent issue of the San Luis Obispo County Occupational Outlook.
Matt Bjerk, 38, is one such worker benefiting from the wealth of new jobs. He was hired almost immediately as a maintenance worker when he moved from Santa Cruz to San Luis Obispo five months ago to attend Cuesta College. Next week, Bjerk starts a new job as installer for his employer, All Seasons Gardening and Landscaping in San Luis Obispo, where he hopes to get a raise from his current $8.50 an hour.
The most recent edition of the SBC Smart Yellow Pages for San Luis Obispo County lists 141 landscaping architects and contractors.
Meanwhile, skyrocketing prices for existing homes are also feeding the landscaping frenzy. With the average county home now exceeding $400,000, most homeowners are sitting on equity that has more than doubled in the past three to five years. Many are tapping that equity to enhance existing front and back yards, often adding luxury features such as outdoor kitchens, fireplaces and water features.
"With home equity going through the roof, people are actually taking loans out to make their current environments better, spending $17,000 to $20,000 to put in a typical back yard," said Erik Wolting, owner of All Seasons Gardening and Landscaping. "People are looking to improve their front and back yards not only for curb appeal, but for entertaining."
As a result, Wolting, who employees 13 workers, said his revenues have probably doubled since 2000, along with his staff that has doubled every year in the same period.
It's a similar situation for Bruce Courter, owner of Day Star Enterprises in Paso Robles, who said he's seeing some of the greatest demand for landscaping services in his 35 years as a contractor. He estimates revenues from his own landscaping and maintenance business -- specializing in concrete, stone and brick patios and walkways -- have climbed 400 percent in the past four years. He has jobs scheduled seven to eight months in advance.
Yards also are going more upscale, Courter said. Rather than standard gray concrete patios and walkways that run about $5 a square foot, homeowners are requesting stamped concrete at about twice the cost, or paying up to $25 a square foot for slate, tile, brick or flagstone.
Homeowners also are relying more on automatic watering systems and colorful foliage plants and shrubs that require minimal water and maintenance and look good year-round, according to Ron Carlock, owner of Ron's Nursery in Grover Beach.
But they are willing to spend more to create something special, he said.
"People want conversation pits outside," Carlock said. "They see outdoor seating at restaurants and want it in their own back yards for family and friends. We are taking our indoors and taking it outside. California weather allows us to do that."
Carlock added design services to his retail nursery business in 2000 and installations in 2003. They now account for about one-third of total revenue.
Homeowners aren't the only ones keeping landscapers busy. New home projects account for millions of dollars annually in new plantings for parks, entrances, streets and yards.
Developer Dick Willhoit, president of Estrella Associates in Paso Robles, estimates 9 percent of his company's development costs for the 200-acre, 481-home River Oaks project in Paso Robles are dedicated to landscaping expenses for parks, entrances and streets. An additional 3 percent of home construction costs pay for individual front and backyard landscaping.
Even when housing construction cools off, all the newly planted greenery will have to be maintained. And that bodes well for the industry's future, since maintenance represents the majority of most landscapers' business.
"People are too busy these days to be a slave to their landscapes on their two days off," Wolting said. "They throw up their hands and call us."
