On visits to San Diego I've seen large slopes covered with a couple different types of groundcover, so I know it exists. I just don't know what it was. You can probably find the same thing and get the plant(s) ID'd via the plant ID forum.

If the wall is in overall functional shape, but there is a spot or two failing, you can have it repaired. When it's effective life is over, you'll need to replace it. Wood is going to be cheaper but have a finite life. Masonry will be more expensive but can potentially last longer if properly built.

I would also recommend looking at planting a single groundcover on this slope. That could be kicked up a notch by adding some bold structural foliage plants like the large aloe I see there or small agave selections.

Vines can make very good groundcovers. Planted at the top, gravity will do the work of covering the slope. Two that might work for you are Trachelospermum jasminoides and Pyrostegia venusta. In California there are bound to be more options.

Shore Juniper, Juniperus conferta is a trailing evergreen groundcover that might work. Again gravity is your friend here. If by chance you have a lawn at the top of this canyon, anything planted at the top of the slope will be getting some water from that.

I am not sure why you think a landscape designer will "take all your money"! Typically, a design consultation - which may be all you need - or even a drafted plan for a small area like this will run only a few hundred bucks, if that. And can make the difference between a cohesive, site appropriate planting or an expensive, trial and error mess.

Given the steepness of the slope, this is not a project I would suggest you ad lib!! Clearing out existing vegetation, laying some sort of erosion controlling geotextile, planting with a drought tolerant, slope stabilizing groundcover (and providing irrigation until establishment) is not going to be a simple or easy task for DIY'ers. Not to mention evaluating the remaining life expectancy of a questionable wood retaining wall and suggesting an economical yet efficient replacement.

Bite the bullet and hire a professional. It is well worth the modest investment!!

It looks like the hill could do with some grading to create terraces for the plants. Even if you can get erosion controlling plants in the ground, you'll lose a lot of water trying to irrigate them.

Native plants are good at erosion control. Here is some a list of native plants useful for erosion control.

Looking at the degree of slope you have there, I very much agree with gardengal about hiring a professional. Unless you are very young and agile or plan on rappeling, this is a daunting slope and you could easily be injured.

Have your retaining walls checked for stability, and choose plants that will help stabilize the earth. You do not want that coming down.

I do all of my own work other than getting my husband to lift the heavy stuff, including planting a fairly steep slope, but even with terracing your hillside looks like an accident waiting to happen. Please be careful.