In one of California’s smallest cities, heavy trucks rumble past the low-slung industrial buildings along Santa Fe Avenue, a major thoroughfare in the heart of Vernon.

Instead of homes, shops and parks, gray warehouse structures with loading docks and parking lots dominate nearly every block in this city, four miles southeast of downtown Los Angeles. Industrial buildings outnumber full-time residents nearly four to one, according to CoStar data.

But city officials hope to modify that industrial dominance, looking to quintuple the population and bring in millions of new investment dollars.

Vernon, with a population of roughly 222, adopted zoning changes on Aug. 1 to encourage residential, live-work, retail and entertainment development in select areas. The changes, though small, are still a major shift for the city known for rows of warehouses and food processing factories with a seal emblazoned with the slogan, "Exclusively Industrial."

The move comes as part of a larger California push toward more housing construction in an effort to combat a decades-long shortage that has left the Golden State with some of the highest residential costs nationally. Vernon is looking to join cities across the United States that have converted industrial properties into living spaces over the years.

The rezoning is also seen as necessary for the 118-year-old city to grow. Vernon is encouraging economic investment, specifically where the industrial real estate has been deemed too small for modern trucking-based warehouse activity. Officials envision new homes will be built there to serve a city that has about 76 residences but holds 55,000 jobs.

Changing an urban profile anywhere in the world doesn't come easy. Vernon could encounter headwinds in trying to attract residential development despite the severe need for housing in Los Angeles County, the nation's biggest by population. Vernon lacks the parks, movie theaters and health clinics that are found in nearby cities. There is a hospital, though, just outside the border of the city that straddles the Los Angeles River and neighbors Los Angeles, Commerce, Maywood and Huntington Park.

There are few scenic places to walk in Vernon, a city crisscrossed by railroad tracks. Sidewalks feature little vegetation to counter the warehouses’ hard metal aesthetic and offer protection from Southern California's sun.

However, converting industrial properties into residential space has been successful elsewhere. In New York's SoHo neighborhood, older industrial buildings became lofts for artists in the 1970s. Investors have spent the decades since flipping older industrial spaces into residences, with examples seen in cities from London to the San Francisco Bay Area.

Public Works Director Dan Wall told CoStar News in an email Vernon has yet to receive any applications for projects involving a mix of uses. However, he said the city has scheduled meetings with property owners and developers to discuss proposals.

Vernon only rezoned 2.2% percent of its footprint for mixed-use development and isn't considering any further changes for now. A spokesperson said the new mixed-use development would not disrupt current and future industrial business.

A local business owner, Steve Freed, said Vernon's gravitation toward new types of real estate is a microcosm of what's happening across California. He has watched Vernon evolve over the past 45 years as a manager of Los Angeles-based Mt. Vernon Industrial, the owner of a warehouse at 3001-3031 Bandini Blvd., about a mile east of the rezoned areas. Heavy industrial companies, including a steel manufacturer and a slaughterhouse, have moved out of Vernon and been replaced by lighter industrial businesses, he said.

Those departures make it more attractive for people to live in Vernon, according to Freed. In addition, he said he knows many of the city's daily workers would like an opportunity to live in Vernon instead of having to drive long distances. Perhaps one day, he said, apartments will bring new retail to Vernon, including a grocery store that caters to full-time residents.

"Vernon is going through a revolution," Freed said. "Hardcore manufacturing is being replaced by other businesses that have a lower impact on the environment."

Still, Freed said he doesn't expect to see most of Vernon's warehouses become homes. The city's central location, proximity to downtown Los Angeles and access to major rail lines and highways make most of its industrial space too valuable to be redeveloped, he said.

That industrial focus stretches back to 1905, when the city was incorporated. At the time, Vernon's founders saw promise for real estate demand due to the intersections of major railroads.

Vernon has since grown into one of the most important industrial areas in Southern California, the nation's most valuable industrial region, with that property valued at about $322 billion, according to CoStar data. The 83 million-square-foot Vernon industrial market itself is valued at more than $23 billion, making it the third priciest industrial market in Los Angeles County, CoStar data shows.

Vernon's large industrial footprint generates a tremendous need for energy. Despite a low residential population, electrical usage factoring in its industrial customer base is comparable to a city with a population of roughly 100,000 people, according to a city spokesperson.

However, in recent years, Vernon has focused on diversifying its economy to include more nonindustrial uses in part to bolster city coffers. The rezoning changes reflect that drive and are also in part due to a state-mandated process for California cities to accommodate more housing. In addition, Vernon wants to boost its population for its own political survival. More residents ensure good governance and avoid "the threat of disincorporation, as manipulation of a small number of voters by an individual or entity could allow for a relatively easy takeover of control," according to city documents.

Vernon spent 34 months looking into mixed-use zoning before approving the change, city documents show. As part of the study, officials examined how new uses would interact with the noise, odor, background contamination, and the processing of hazardous materials that go on in and around the city's industrial space.

The city is trying to diversify its landscape at a time when industrial demand in greater Los Angeles and the nearby Inland Empire has softened along with consumer spending. Vacancy has risen from 2.2% a year ago to more than 4% today in greater Los Angeles, according to CoStar data. In the Inland Empire, vacancy has risen to 4.7% from 1.5% a year ago.

David Evans — a multifamily broker and senior associate of Kidder Mathews who works in South Los Angeles — said affordable housing could find success in Vernon's future residential market. However, other types of residential properties may struggle to find demand, he said. Evans has not done any multifamily sales in Vernon, and there haven't been any apartment sales in Vernon in the past decade, according to CoStar data.

"If it's going to be market rate or luxury, it's going to struggle," Evans said.

The last apartment complex built in Vernon was in 2015 when the 45-unit Vernon Village Park was completed. The affordable housing development was "one of the first new housing projects" in the city's history, according to Los Angeles-based developer Meta Housing. The homes are surrounded by industrial warehouses, including an Amazon facility and an upholstery shop. A Meta Housing representative didn't respond to an emailed request to comment from CoStar News.

Ryan Patap, senior director of market analytics for CoStar in Los Angeles, said it's surprising to see the historically industrial Vernon attempt to woo mixed-use development. However, he said the residential space may find demand given Los Angeles' need for housing.

"Industrial areas have turned into hip creative offices and apartments across the country, including nearby in the Arts District in Los Angeles," Patap said.

Retail real estate professionals and property owners in Vernon are excited for more full-time city residents.

Caleb Morrison, an associate of real estate brokerage Illi Commercial, said it's not easy to lease retail space in Vernon.

Morrison has been marketing two spaces for roughly six months along Santa Fe Avenue near the rezoned areas. New apartment development would increase retail demand in a city where commercial space mostly caters to daytime workers, limiting the number of retail businesses that want to operate there, he said.

Until the apartments come, Morrison said he hopes to lease the space to retailers that can scratch out enough business from the truck and commuter traffic driving to and from work. He said he doesn't receive much inbound interest for the retail site, unlike his other listings in Los Angeles.

"It's a bizarre little pocket of the world," Morrison said.