After the Mošinsky's 1902 annexation of Lašćina and Žitnjak municipalities into the City of Zagreb, and urban sprawl encompassing areas east of Heinzel Avenue, poor settlements sprang up north of the railway exiting the city.

After the World War I, the Austro-Hungarian empire dissolved and Zagreb was incorporated in the Kingdom of Yugoslavia.

While being a capital of a province of sorts, Zagreb stopped being in a shadow cast by an economically and culturally more important city.

It became the center of the Yugoslav economy and started to attract workers and people from rural areas.

Although the real estate prices have risen, Stara Peščenica today remains a randomly built neighborhood with lots of different sizes and a structure not resembling the grid of nearby Donji Grad and southern Maksimir.