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The European settlement was started by refugee Huguenots (French Protestants) in 1688, who were fleeing religious persecution in France (such as Dragonnades) after the king's revocation of the Edict of Nantes. Many of the settlers were artisans and craftsmen from the city of La Rochelle, France, thus influencing the choice of the name of "New Rochelle".

Some 33 families established the community of la Nouvelle-Rochelle in 1688. A monument containing the names of these settlers stands in Hudson Park, the original landing point of the Huguenots. Thirty-one years earlier, the Siwanoy Indians, a band of Algonquian-speaking Lenape (also known as the Delaware by English colonists) sold their land to Thomas Pell. In 1689, Pell officially deeded 6,100 acres (25 km²) for the establishment of a Huguenot community.Jacob Leisler is an important figure in the early histories of both New Rochelle and the nation. He arrived in America as a mercenary in the British army and later became one of the most prominent merchants in New York. He was subsequently appointed acting-governor of the province, and it was during this time that he acted on behalf of the Huguenots.

Of all the Huguenot settlements in America founded with the intention of being distinctly French colonies, New Rochelle most clearly conformed to the plans of its founders. The colony continued to attract French refugees until as late as 1760. The choice of name for the city reflected the importance of the city of La Rochelle and of the new settlement in Huguenot history and distinctly French character of the community. French was spoken, and it was common practice for people in neighboring areas to send their children to New Rochelle to learn the language.

In 1775, General George Washington stopped in New Rochelle on his way to assume command of the Army of the United Colonies in Massachusetts. The British Army briefly occupied sections of New Rochelle and Larchmont in 1776. Following British victory in the Battle of White Plains, New Rochelle became part of a "Neutral Ground" for General Washington to regroup his troops. After the Revolutionary War ended in 1784, patriot Thomas Paine was given a farm in New Rochelle for his service to the cause of independence. The farm, totaling about 300 acres (1.2 km²), had been confiscated from its owners by state of New York due to their Tory activities.

The first national census of 1790 shows New Rochelle with 692 residents. 136 were African American, including 36 who were freemen and the remainder slaves.

Through the 18th century, New Rochelle had remained a modest village that retained an abundance of agricultural land. During the 19th century, however, New York City was a destination from the mid-century on by waves of immigration, principally from Ireland and Germany. More established American families left New York City and moved into this area. Although the original Huguenot population was rapidly shrinking in relative size, through ownership of land, businesses, banks, and small manufactures, they retained a predominant hold on the political and social life of the town.

The 1820 Census showed 150 African-Americans residing in New Rochelle, six of whom were still slaves. The state abolished slavery by degrees: children of slave mothers were born free, and all slaves were freed by 1827.

In 1857 the Village of New Rochelle was established within the borders of the Town of New Rochelle. A group of volunteers created the first fire service in 1861. In 1899, a bill creating the New Rochelle City Charter was signed by Governor Theodore Roosevelt. It was through this bill that the Village and Town of New Rochelle were joined into one municipality. In 1899, Michael J. Dillon narrowly defeated Hugh A. Harmer to become New Rochelle's first mayor. The recently established city charter designated a board of aldermen as the legislative unit with two members to be elected from each of four wards and 10 elected from the city at-large.

By 1900, New Rochelle had a population of 14,720. Throughout the city, farms, estates, and wooded homesteads were bought up by realty and development companies. Planned residential neighborhoods such as Rochelle Park, one of the first planned communities in the country, soon spread across the city, earning New Rochelle the sobriquet "City of Homes". In 1909, Edwin Thanhouser established Thanhouser Film Corporation. Thanhouser's Million Dollar Mystery was one of the first serial motion pictures. In 1923, New Rochelle resident Anna Jones became the first African-American woman to be admitted to the New York State Bar.

Poet and resident James J. Montague captured the image of New Rochelle at the time in his 1926 poem "Queen City of the Sound".

In 1930, New Rochelle recorded a population of 54,000, up from 36,213 only ten years earlier. During the 1930s, New Rochelle was the wealthiest city per capita in New York state and the third wealthiest in the country.

By the end of the century, the Metro North railroad station was rebuilt along with a $190 million entertainment complex, nicknamed New Roc City, which features a 19-screen movie theater, an IMAX theater, an indoor ice-hockey arena, mini-golf, go karts, an arcade, restaurants, a hotel, loft-apartments and a mega supermarket. The complex was built on the site of the former New Rochelle Mall, which had opened in 1968.

In 2014, New Rochelle's planning board approved $149 million in developments to three major sections of the city. The developments include restaurants, stores, hotels, an entertainment area, theaters and a mixed-use waterfront area, and are expected to be completed within 10 years.

In March 2020, New Rochelle became one of the first reported centers for COVID-19 transmission in New York state during the 2019–20 coronavirus outbreak. On March 10, 2020, Governor Andrew Cuomo ordered components of the New York Air National Guard and New York Army National Guard to institute a one-mile radius containment area centered around the Young Israel of New Rochelle synagogue in the Wykagyl section of the City in an attempt to stem the spread of the virus. The institution of this containment area, which covered multiple neighborhoods in New Rochelle and extended into parts of the neighboring Town of Eastchester, marked the first use in the state of New York of social distancing measures and the closure of schools, houses of worship, and other institutions to combat the spread of the pandemic. Large gathering places including schools and places of worship were declared closed, while troops were deployed to provide logistical support such as assistance with the distribution of food and the disinfection of public areas.

As of the 2010 United States Census, there were 77,062 people living in the city. The racial makeup of the city was 64.9% White (47.9% Non-Hispanic White), 18.1% Black, 0.1% Native American, 4.2% Asian, <0.1% Pacific Islander, 0.3% from some other race and 1.5% from two or more races. 27.8% were Hispanic or Latino of any race.

As measured by the census of 2000, New Rochelle had a population of 72,182 people, 24,275 occupied households, and 17,546 families living in the city. The population density was 6,973.5 people per square mile (2,692.7/km²). There were 26,995 housing units at an average density of 2,608.0 per square mile (1,007.0/km²). The racial makeup of the city was 68% White, 19% African American, 0.20% Native American, 4% Asian, 0.05% Pacific Islander, 6% from other races, and 3% from two or more races. 20% of the population were Hispanic or Latino of any race. In the city, the population was spread out, with 24.0% under the age of 18, 8.7% from 18 to 24, 29.5% from 25 to 44, 22.2% from 45 to 64, and 15.5% who were 65 years of age or older. The median age was 37 years. For every 100 females, there were 90.7 males. For every 100 females age 18 and over, there were 85.9 males. There were 26,189 households, out of which 32.7% had children under the age of 18 living with them, 50.5% were married couples living together, 12.5% had a female householder with no husband present, and 33.0% were non-families. 28.0% of all households were made up of individuals, and 11.8% had someone living alone who was 65 years of age or older. The average household size was 2.68 and the average family size was 3.29.

19,312 residents of New Rochelle were enrolled in school, with 2,743 in pre-school or kindergarten, 8,105 in elementary school, 3,704 in high school and 5,030 in college or graduate school. Out of 42,872 individuals over the age of 25, 20% (9,766) had no high school diploma, 23% (11,325) were high school graduates, 14% (6,710) achieved some level of college education, 5% (2,347) held an associate degree, 19% (9,120) held a bachelor's degree and 20% (9,604) possessed a graduate or other advanced degree.

The working population was 35,262, 95.7% of whom were employed. The occupational breakdown had 42% working in 'management', 25% working in 'sales', 17% in 'services', 8% in 'construction', and 7% in 'production and transport'. The average daily commute was 30 minutes, with 60% driving to work, 12% carpooling, 18% traveling via public-transportation and 7% using other means.

According to the 2007 Census Bureau estimates, the median income for a household in the city was $64,756 and the median income for a family was $88,004. About 9.8% of the population lived below the poverty line.

According to the New Rochelle Police Department, New Rochelle is the safest city of its size in New York State and the fifth-safest city of its size in the United States. The majority of crimes committed within New Rochelle are non-violent property crimes, including burglary, larceny-theft, motor vehicle theft, and arson. Property crime, on a scale of 1 (low crime) to 10, is 4 compared to the US average of 3. Violent crime (murder and nonnegligent manslaughter, forcible rape, robbery, and aggravated assault) is 3, equal to the US average.

New Rochelle is commonly referred to as the Home Town because of the significant amount of single-family, residential development that exists throughout most of the city. While the formerly industrial downtown section is more densely developed, with condominiums, high rises, offices, shopping centers, affordable housing complexes, a medical center, nursing homes, two college campuses and an intermodal transportation hub, the rest of the city consists of sprawling, residential neighborhoods. There are more than 11,500 single family units within the city, more than that of neighboring Larchmont, Mamaroneck and Scarsdale combined. The total number of separate households surpasses 26,000, more than that of neighboring Pelham, Pelham Manor, Eastchester, Scarsdale, Mamaroneck and Larchmont combined.^{[citation needed]}

Some of the country's most expensive real estate can be found in New Rochelle. The north end of the city (10804) is ranked in Forbes magazine's list of the '500 most expensive zip-codes' in the country. According to the list, the average household income was $199,061 and the average home price was over $752,000. Homes in Premium Point, a gated section of the city on Long Island Sound, are priced anywhere from $2 to $20 million. The three newest residential developments, 'Kensington Woods', 'The Greens at Cherry Lawn' and 'Riviera Shores', are all gated communities with single family homes priced from $2 million. With a population approaching 80,000 residents, New York State law dictates that the city provide an adequate amount of affordable housing units. New Rochelle has historically met and surpassed state requirements. It is working to replace the existing Weyman Avenue Projects with more community-centered, townhouse-style housing units. By embracing the needs of the poor, New Rochelle sets a precedent for other suburban communities to follow. Neighboring towns, including Mamaroneck, Larchmont and Scarsdale, have failed to meet the minimal affordable housing requirements set by the state. Popular consensus is that the presence of the poor precludes that of the middle-class and the wealthy. Considering the large number of working-class and affordable housing units found 'Downtown', the high property values prevalent throughout most of the city reflects the true economic diversity of New Rochelle. It is home to a range of families, from the financially disadvantaged to the very wealthy. One of 'the wealthiest people in the United States,' according to Forbes magazine, was longtime New Rochelle resident and businessman Sidney Frank.

Within the greater city borders are many established neighborhoods and subsections, several of which are larger in both size and population than neighboring villages of Larchmont, Bronxville and Pelham Manor. The public community areas most noted include: Bayberry, Beechmont, Bloomingdale Estates, Bonnie Crest, Daisy Farms, Davenport Neck, Echo Manor, Forest Heights, Forest Knolls, French Ridge, Glen Island, Glenwood Lake, Lake Isle, Larchmont Woods, Northfield, Paine Heights, Pinebrook, Premium Point Park, Quaker Ridge, Residence Park, Rochelle Heights, San Souci, Scarsdale Downs, Shore Road, Sutton Manor, Vaneck Estates, Ward Acres, Wilmot Woods and Wykagyl. Brookridge, Riviera Shores, Premium Point, Pinebrook Hollow, Kensington Woods, and Cherry Lawn are gated neighborhoods accessible only by those immediate residents.