The area was the center of European and American settlement during Spanish and later Mexican rule. Following American annexation and the California Gold Rush, the area boomed rapidly and the Bay shoreline, which originally ended at Battery St, was filled in and extended to the Embarcadero. Gold Rush wealth and business made it the financial capital of the west coast as many banks and businesses set up in the neighborhood. The west coast's first and only skyscrapers, were built in the area along Market Street.
The neighborhood was completely destroyed in the 1906 Earthquake & Fire (although miraculously, the area's skyscrapers survived), and rebuilt. Because of state wide height restrictions due to earthquake fears, the district remained relatively low-rise throughout the 20th century until the late 1950s, when due to new building and earthquake retrofitting technologies, the height restrictions were lifted, fueling a skyscraper building boom. This boom accelerated under mayor Dianne Feinstein during the 1980s, something her critics labelled as "Manhattanization. This caused widespread opposition citywide leading to the "skyscraper revolt" similar to the "freeway revolt" in the city years earlier. The skyscraper revolt led to the city imposing extremely strict, European-style height restrictions on building construction city-wide.
Owing to these height restrictions (which have been relaxed and overlooked over the years), overcrowding, and changes and demand in the local real estate market, development in the area, as well as the district's boundaries as a whole have shifted to SOMA as the focus has shifted from building office space to high-rise condominiums and hotels. Notable examples include the Four Seasons Hotel, The Paramount (the tallest apartment building in San Francisco and the West Coast), and the Millennium Tower, currently under construction.