Best way to landscape a hill without grass?
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terrace it
Plant it with ground cover plants like clover, or you could plant something like the prostrate rosemary plant.
I wish you'd included a photo so I could see the grade of the hill. If it's 45' or more, yes, I would consider terracing. If it's less, then you can landscape without terracing by using steel edging, rocks and ground cover or other low growing plants. Do not use the edging in straight lines. Nature isn't straight. Pick a design, determine your volume of rock (a combo of river rock and smaller rock (not pea gravel) is nice, and how much green area you want. Scrape off your turf or kill it with a vinegar acid wash and cover the whole area with a quality landscape cover first. Pound in the edging in curves and lay in the rocks. Add your ground cover plants with enough room between them to let them spread. You CAN use mulch here. Have patience. This is a big project. Don't try to do everything yourself in a couple of weekends. Plus, it will probably take a full season to "settle". Cheers!
And adding to Jan's suggestion, search for native plants for your hill. They will settle in and adapt better. Plus, you will have restore your natural habitat. If you have trouble, contact a local Department of Agriculture extension office or garden clubs. Good luck!
This is a great place to make a stunning garden.
Cut in some walking spaces in the hill so you can get in there to tend plants. Then use plants that do not require a lot of work. Use some decorative grasses, miniature shrubs, and some big pots for colorful annuals...oh, and don't forget to put in some rocks!!
Cordyline is a maroon spike that is stunning; variegated Lariope does not overtake your yard; Cora Belle is beautiful in a pot.