The area of what is Montrose today was originally envisioned as a planned community and streetcar suburb dating back to the early 20th century before the development of River Oaks. Developer J. W. Link and his Houston Land Corporation envisioned a great residential addition according to the neighborhood's original sales brochure. Link's planning details for the area included four wide boulevards with the best curbing and extensive landscaping. Link built his own home in Montrose, known as the Link-Lee Mansion, which is now part of the University of St. Thomas campus.  A streetcar, the Montrose Line, ran through the neighborhood. In the brochure, Link wrote what now seems like a huge understatement: Houston has to grow. Montrose is going to lead the procession. It did, and the procession eventually continued far beyond the neighborhood. Montrose was first platted in 1911.
In 1926, the Plaza Apartment Hotel, Houston’s first apartment hotel opened on Montrose Boulevard. The hotel was home to many of Houston’s leaders, including Dr. Edgar Odell Lovett, the first president of Rice University. Modeled after the Ritz-Carlton in New York, the hotel cost over one million dollars to construct.
During the 1960s and 1970s, Neartown was known for its Bohemian flavor—this would spawn both the Westheimer Colony Art Festival in 1971 and the subsequent street fair in 1973, which would become known as the Westheimer Street Festival. Also starting around the 1970s the area became known as the center for the gay and lesbian community of Houston.
During the 1990s through to recent times, this area has become increasingly gentrified with a trend towards remodeled and new homes, high rents, upmarket boutiques and restaurants. Neartown has become an eclectic niche market for office buildings in Houston, with both new development and redeveloped older buildings dotting Montrose Boulevard.