Long tradition of that. Back to before the time when they called it urban fantasy. Robert A. Heinlein's "Magic, Incorporated," and Poul Anderson's Operation Chaos are classics of the genre.
But covert magic has an older tradition. In the loosest possible sense, the Good Folk, or the like, in the neighborhood, were always secretive for the classic reason that you could look about and see that they were always either not there or secretive. And as the genre fantasy took form, there was always a current of its happening the neighborhood -- secretly.
Which is not fully covert. I suppose you could write a book in which it was fully covert, in which all the characters are magical and behind the Masquerade from the word go, but I haven't seen any. (And the character new to the Masquerade is a notoriously wonderful devise for info-dumping.) And then there's the whole spectrum of covert to overt magic -- worlds where unless you get taken fully in, they erase your memory of magic; worlds where if you go to the right place, you can buy spells or consort with werewolves; worlds where the government openly hires the wizards -- rather than their being a great divide.
Which means, by the same token, that there's a spectrum of how clearly the world is alternate history.