The Cost of California

The venerable American guidance to “Go west, young man” may well still ring with all the sanguine possibilities of hope, reinvention and manifest destiny as the adage did upon its mid-19th century inception.

Though, today, the phrase carries a caveat: When heading to California, pack some cash with that hope.

Boasting the fifth-largest economy in the world, 40-million-resident-heavy California is the nation’s most populous state — and one of the most expensive places to live and operate a golf business.

Still hot on the heels of historically high national inflation numbers seen in 2022 and currently amid the loftiest federal interest rates of the new millennium, the Golden State has undoubtedly lost some glimmer for the middle and working classes simply aiming to keep up with daily expenses.

Having declined in population annually from 2020 to 2022 before a modest 0.2 percent gain in state residents in 2023, California’s general cost of living and price barriers toward owning a home are proving a burgeoning burden to much of the populace. And, for those who do own, the ability to insure their houses has become increasingly onerous, considering the mass exodus of insurance companies from the state due to costs and concerns about increasing wildfire risks.

From greenbacks (or lack thereof) to green grasses, the California narrative is dichotomic. Home to the nation’s most golfers (more than 2.7 million, according to the National Golf Foundation) and the second-most golf courses (961, second only to Florida), the state continues to brim with swing business. And yet, with labor shortages and/or competition impacting course and club hiring prowess and both member and daily-rate green fees rising in concert to meet the pressures of wage mandates, a coalescence of costs is nearing a critical mass, even amid an ongoing post-pandemic surge in golf participation. Toss in the state’s water worries and its laudable environmental aims, and the cost of California has industry experts and those with boots on the ground planning for some bust in the boom.

Drive-thru worries

In concert with a state-mandated minimum wage increase this year to $16 an hour, a California law to compensate fast-food workers a minimum of $20 per hour took effect in April.

While the golf industry (and, uniformly, all sources herein) both supports and applauds livable — if not competitive — wages, the tally is starting to take a toll on maintenance staffs that have long wrestled with both attaining and retaining grounds talent.

“Obviously, the last four years have been a confluence of worldwide events that have had an effect in increased costs on all manner of things, including from a golf maintenance perspective, especially in California,” says Jeff Jensen, southwest regional field staff representative for the GCSAA. “It’s an expensive place to live, and an expensive place to do business.”

Across the (vast) checklist of cost concerns, California labor — which sees many municipalities exceed the state’s $16 basic minimum wage — tops the list for many.

“On a national level, about 57 percent of the average maintenance budget is basically labor costs,” Jensen says. “California has the second-highest minimum wage in the nation, just slightly behind Washington state. The golf industry is certainly a believer in providing a living wage for our workers, but the increases do make it difficult to operate at the levels at which we are operating.”

Vending value meals in lieu of verticutting is a near-existential threat to the state’s golf labor force.

“Fast-food and construction jobs have always been labor competitors for golf courses,” Jensen adds, “but now it’s even more of a challenge to find good workers. With the minimum wages for fast-food workers in California increasing, that makes it more difficult to attract golf maintenance employees. So we’ve got a little more competition there.”

Competition breeds both innovation … and flux.

“We’re trying to figure out at what point won’t there be the appetite to pass through the rate at which wages are increasing,” says Bill O’Brien, senior vice president of operations at Troon, which has 15 California properties in its portfolio. “Legislation that has baked-in these minimum amounts are at the risk of outpacing what a club or course would otherwise be able to factor into the normal business operation without passing those costs on by way of higher prices. And it concerns our operators as to what extent there’ll be a ceiling there. It doesn’t seem as though there’s an end in sight.”

Across the state’s more than 155,000 square miles of land mass, superintendents are feeling the squeeze of direct competition for staff.

“The minimum for fast-food (wages) is somewhat concerning,” says Troy Flanagan, director of golf maintenance at The Olympic Club in San Francisco. “Luckily, our hourly employees all make over $20 an hour, but they’re working hard for it, just like most everybody in the industry. Up early, out working in the elements. It’s a lot easier to be inside a Burger King and make close to the same amount of money.”

Even with competitive field staff wages, the demands of golf’s grounds jobs aren’t just about going to work — they demand going to work.

“It’s not just about the wage,” Jensen says. “We’re an outdoor game with a 5 a.m. start time, and then working in the elements, whether it’s the heat of the Coachella Valley or the rain of Northern California. So, the environment and early wakeups also make it tough to attract employees.”

From NorCal to SoCal, the narrative doesn’t waver.

“You’re trying to be competitive and have these base pay scales for scope of work and different jobs,” says Jonas Conlan, director of agronomy at Mission Hills Country Club in the Coachella Valley pocket of Rancho Mirage. “But as these prices for per-hour jobs get higher, we find ourselves with longtime employees who are a few dollars below that pay grade and it’s on us to figure a way to bring these guys or gals up to that level.”

In the current economic climate, neither the shine of history nor the allure of future glory can pay today’s bills.

Even amid the prestige of The Olympic Club — host to five U.S. Opens and future home to the 2028 PGA Championship and the 2033 Ryder Cup — or Mission Hills — former host of the LPGA’s Chevron Championship and annual home to PGA Tour Champions’ Galleri Classic — employee leveraging, while understandable, is finding more frequency.

“If a guy comes to me and tells me they can easily leave for a few more bucks at McDonald’s, I mean, I don’t want to lose a good employee who’s been here for a decade over a few bucks an hour,” Conlan says. “I try to take care of my guys as best as I possibly can and will go to the extreme if I need to. And, hopefully, by doing that, there’s enough of that respect in both the present and the future that I can convince them to stay here and work out their deal.”

Labor issues are nothing new to golf’s maintenance leaders. Yet the time required to keep staff happy comes at its own costs.

“Back in the day, labor was still a big thing,” adds Conlan, who has worked in the desert for more than a quarter of a century. “But not like today, where you really have to be on top of it, watch those labor dollars and hours closely. It’s a different challenge from even five years ago. It now kind of feels like a non-stop, perpetual thing where I’m trying to get people to stay, get them a pay bump. I’m doing this kind of thing a lot more now than I ever have in my entire career.”

The (not-so-golden) bear of inflation, equipment and resources

The domino effect of golf’s popularity translates to more play, more wear, more tear and, ultimately, more expectation for prime conditions.

The pressure of filling out a maintenance staff to meet said expectations isn’t the lone woe of California cost.

“Doing business in California is much more expensive — no matter what the business is,” says Craig Kessler, the longtime director of governmental affairs for the Southern California Golf Association who now works with the association as a public affairs consultant.

The name resource for course conditions comes with an increasingly high California price tag.

“The golf industry has some peculiar problems and, for a long time, one of the key costs across much of the state is water,” Kessler says. “The cost of water has been going up faster than the Consumer Price Index for some time, and it’s only escalating.”

In July, California’s State Water Resources Control Board approved a new policy that will force suppliers for certain municipalities to reduce water amounts by nearly 40 percent come 2040.

“A component of the water cost is that the golf industry understands that it is getting increasingly cut back on its allocation,” Kessler continues, “and the industry also needs to invest in those things, which can reduce its water consumption, whether that’s new irrigation equipment or systems, turf removal, turf conversion, re-lining of lakes. And these are things that, in other places in the country where water isn’t such an issue, would be less compelling.”

While California courses do enjoy the price protections of Proposition 218, such guardrails only provide so much salve. “The Metropolitan Water District of Southern California — which is the largest water district in the country and provides water to about 19 million residents — we’ve seen rates just recently rise 8.5 percent for 2025, with an additional rise for the same amount come 2026,” Jensen says.

As for what the water is watering?

“The costs for seed, especially in areas like the Coachella Valley where there’s a lot of overseeding … if you look back just to 2019-20, we were paying about $1.10 per pound for ryegrass seed,” Jensen says. “In ’21, during the pandemic, that price was over $2 a pound. It’s stabilized down to around $1.60, but that’s still much more than just five years ago.”

As for the domino of what maintains the grass that comes via the expensive seed and was grown by the costly water?

Well, more problem than solution exists across the national equipment realm, especially in California, which, at the outset of 2024, and in a continually commendable effort to lead the union toward a zero-emissions future, banned the sale of new gas-powered equipment using small, off-road engines.

For course owners and operators even slightly tarrying in the contact or content game, supply-line shortages find new equipment — electric or gas-powered — both costly and tough to find, just as concurrent borrowing costs are adding more bottom-line bruise to those who can either find or afford said materials.

To wit: New irrigation systems can now run as much as $5 million, the cost of a new ProGator is up more than 70 percent, and everything from GPS sprayers to fairway and rough mowers are seeing rising price tags, a tally that has made the used equipment market far more competitive.

“Equipment prices have absolutely skyrocketed, along with interest rates for leasing,” Flanagan says. “Our last lease was in 2020, rates were low and we got in before COVID really started to cause problems with the supply chain. We just went back in for our next lease, and it varies by which piece of equipment, but some items are double in price and, of course, the rates are way higher.”

While golf’s recent boon has impressively witnessed countless California courses reinvest, remodel, reinvigorate and reimagine their respective grounds with projects long deferred through the game’s static years, the burgeoning prices of equipment are now coming with both concessions and/or passed-along costs.

“We’re a big club. We do well financially. I just have a tough time understanding how a lot of clubs out there can keep buying new equipment at these prices,” Flanagan says. “And it just seems like we can’t charge golfers that much more money to keep up with us. What I’m hearing from some people in, say, a daily-rate situation, is that maybe they needed 10 pieces of equipment and they were able to get six. So, they’re keeping older pieces of equipment longer.”

A future in flux

For both sides of the course equation — players and workers — the concerns of a California critical mass should be very, very real.

Per the latter, enhanced attention to employee recruitment and happiness has become paramount.

“Today, being a better employer is at the top of all of our lists,” O’Brien says. “I often tell folks that we’re not in the business of hiring, we’re in the business of recruiting. And that’s not just about the wage, nor do we want to compete on the wage alone. The cool part of what we do is trying to attract employees who want more than a job but are rather focused on a career.”

At many facilities, a path of opportunity through golf is a narrative no longer reserved for the back of the book.

“We’ve gone to great lengths to build out a talent acquisition team in our HR department,” O’Brien says. “We leverage technology to make sure we’re in front of people who are looking for work on platforms like LinkedIn or Glassdoor or Indeed. What we’ve seen since COVID is almost radical amounts of turnover, though that’s been minimized a bit in recent years. But it still means that we need to give potential employees better insights into what it means to work at our clubs. And, also, finding ways to reduce turnover can go a long way toward lowering a club’s costs. And that means keeping folks engaged and committed.”

On the player side of the spectrum, keeping golfers appeased and maintaining the game’s present momentum means that precarious price points trend upward at the risk of alienating much of the tee sheet.

“California has a very limited supply, but an extraordinarily high demand,” Kessler says. “So the good news is that, although you have all these costs, you also have a population — or at least a certain percentage of the population — which can absorb these costs. The worrisome part at the moment is that the top 20 percent of the population, which I would call the ‘asset class,’ is doing pretty well. Right now, they can pay these costs. Those who aren’t part of that class, right now, are very restless, very angry and demanding radical change. That presage, moving into the future, may end up being reflected in a different set of fiscal policies which may not be all that beneficial to that asset class.”

While myriad clubs across the state are enjoying membership waiting lists and, per Kessler’s words, bustling demand on tee sheets, golf, like much of society, is ever-cyclical.

“Luckily, golf right now is still booming, so people are willing to pay,” Flanagan says. “But, for those of us who’ve been around the game for a while, we’ve seen the upswings, we’ve seen the downswings. And I know the downswing is comin’ — I just hope that’s not for many, many years. But if we keep going to the golfer and asking them to spend more money, at some point, people might stop coming out to the course.”

For the vast majority of California residents and golf guests, price points do come with a ceiling.

“It means that you need to charge more to your members or for your greens fees, so you’re just constantly making adjustments,” Conlan says. “At some point, people will say, ‘Enough is enough.’ They either won’t pay a certain amount, or they’ll play once a week instead of three times.”

Of all the game’s post-pandemic gains in participation, popularity and diversity, the present-day fairway party is trending toward a dangerous cost call. And in the mainland’s costliest state, the sobering price tags of passed-along consumer receipts may soon run the risk of undoing all the strides golf has made in recent years. If one can’t pay, one can’t play.

“Inevitably, longer term, golf needs to begin recognizing that not everything is about the next quarter,” Kessler says. “What are some of the longer-term strategies, other than the cheerleading: ‘Golf’s never been bigger or better or more successful!’? Well, we’ve seen these heights before, and then hit a long, long lull.”

Judd Spicer is a Palm Desert, California-based writer and senior Golf Course Industry contributor.