The old city, close to the sea, was turned into 'Centro' (Center) - region of commerce and business, while the residential urban fabric expanded out along the coast and towards the interior to form the Northern Zone. Expansion had to manoeuvre around the peculiar topography of the city, where mountains are carved through by valleys and lined by beaches.

Between 1920 and and late 1950's Rio de Janeiro became extremely popular with high-end visitors and international celebrities - it was during this period, in 1923, that the famous Copacabana Palace Hotel was inaugurated, and famous movies were filmed.

As of the the 1930's the ocean-front districts of Copacabana, Ipanema and Leblon, which had previously been conceived of as exotic beach destinations, became highly regarded residential locations, thanks to the opening of the tunnels, and the arrival of tram lines.