Arroyo Grande is located at (35.120878, -120.586799).
There were 6,478 households out of which 29.0% had children under the age of 18 living with them, 55.0% were married couples living together, 9.4% had a female householder with no husband present, and 32.8% were non-families. 27.3% of all households were made up of individuals and 14.4% had someone living alone who was 65 years of age or older. The average household size was 2.41 and the average family size was 2.94.
In the city the population was spread out with 23.3% under the age of 18, 6.7% from 18 to 24, 25.1% from 25 to 44, 24.6% from 45 to 64, and 20.3% who were 65 years of age or older. The median age was 42 years. For every 100 females there were 88.9 males. For every 100 females age 18 and over, there were 84.5 males.
The median income for a household in the city was $48,236, and the median income for a family was $55,494. Males had a median income of $41,304 versus $30,688 for females. The per capita income for the city was $24,311. About 4.3% of families and 6.9% of the population were below the poverty line, including 6.8% of those under age 18 and 5.4% of those age 65 or over.
The earliest inhabitants of the Arroyo Grande valley were Chumash Indians. The first European to see the area was Spanish explorer Juan Cabrillo. The Mission San Luis Obispo de Tolosa was established nearby, and agricultural activities expanded into the area. The Arroyo Grande valley was found to have particularly fertile ground, and was given the name for "wide riverbed" in Spanish.
Francis Ziba Branch, originally from New York, saw the area on a hunting expedition during the period when California was part of Mexico. Branch married Dona Manuela Carlona, and this marriage entitled Branch to file claim for a Mexican land grant. In 1836 he and his wife and baby son moved onto the 17,000-acre Santa Manuela Rancho.
They were managing a successful cattle ranching operation when California became a U.S. territory, and then a U.S. State. But some years later they suffered financial difficulties during a drought when many cattle died. They sold off smaller parcels of land to settlers. In 1862, the San Luis Obispo Board of Supervisors established the township of Arroyo Grande. Businesses developed along a road called Branch Street to serve local agriculture. A railroad depot was built in 1882. The city of Arroyo Grande was incorporated on July 10, 1911.
This community experienced rapid growth in the 1970s and 1980s, partially due to the expansion of the wastewater treatment plant, under an EPA Clean Water Grant, that removed a growth constraint. This federal grant progam required preparation of an Enivronmental Impact Report, which document provided much of the initial environmental database for Arroyo Grande.