When the South University Area Association approached city council to request the rezoning of its district six years ago, its argument was simple: existing demand for development was being stunted by restrictive zoning.

“South U’s zoning was originally changed years ago because there was an outcry over University Towers being built,” explains Maggie Ladd, director of the South University Area Association. “They went too far in the opposite direction, cutting the zoning in South U to the most restrictive in the city. It stopped development for decades.”

The association asked for the rezoning in the belief that not only would the market support multiple high-rise housing developments near campus, but also that their residents would spur exactly the type of economic activity the area’s merchants needed to grow and thrive.

More than half a decade later, it’s looking like they were right. With the ten-story Zaragon Place leasing for its third school year and the fourteen-story 601 Forest under construction–and developer Rick Perlman’s fourteen-story Zaragon II about to join the ten-story 411 Lofts in the State Street district nearby–that adds up to a lot of faith that students will keep moving into high rises near campus. All told, more than 1,500 beds have been or are about to be added to downtown-zoned areas near campus.

The recently completed A2D2 rezoning simplified the rules governing new construction downtown. But downtown professionals credit market demand, not the new overlay zoning, for all the development. As it turns out, many of the projects were already under way when the A2D2 zoning was finalized.

“A2D2 doesn’t trigger anything,” says Ann Arbor Downtown Development Authority executive director Susan Pollay. “It’s just another tool in the toolbox for development.”

Pollay explains that the real goal of the new zoning isn’t necessarily to spur growth. It is to streamline the process so that the right kind of growth can more easily occur. “Everyone talks about the height issue,” she says, “but A2D2 allows for greater flexibility, with the idea that a good building will have multiple users.”

Such mixed-use buildings are exactly what the State Street and South University districts are seeing. Each is bringing not only residential space, but also ground floor, white box retail space. And the merchants couldn’t be happier.

“The more people living in the neighborhood, the more business the merchants are going to do,” says Ed Davidson, owner of State Street’s Bivouac. “I’m hearing nothing negative. Everyone I’ve talked to is delighted.”

Davidson, who has operated his business in the State Street district for decades, believes the recipe for a vibrant, well-rounded urban living experience is almost complete, with shopping, dining, and entertainment opportunities already in place for residents. With a CVS Pharmacy about to move in, he says, the area is beginning to change from a destination district to a genuine neighborhood.

“The final piece to the puzzle is a grocery with more canned goods,” says Davidson. “Then you could live down here and can sell your car if you wanted to. More foot traffic means more business. I’m all for it. I wish we’d build more high rises.”

He might just get his wish. On Church Street, Pizza House co-owner Dennis Tice has plans to add a twelve-to-fourteen- story housing development above his current building.

In fact, Tice has been working on the plans for this development for more than fifteen years. After waiting out the changes in the South University zoning, he now has one more obstacle to clear: he says the project is being slowed by the city’s current lack of a definition for the “payment in lieu of parking” clause in the new zoning. Tice’s development wouldn’t be able to provide the amount of parking required, and he’s willing to compensate the city–he just doesn’t know how much it will cost, and neither does the city.

“The city is working on it,” says Tice. “They’re aware that there’s a big hole in the zoning.”

Tice’s stalled project places further emphasis on the nuanced relationship between zoning and development. Rezoning– whether it’s a simple change in height limit or a broad plan like A2D2–seems to have helped but not caused, streamlined but not triggered, the students’ move downtown. Simple demand is proving to be a stronger explanation.

That demand doesn’t appear to be going anywhere either. Despite the recent influx of housing in his neighborhood, Tice remains enthusiastic about his project.

“Not only do I believe the market is deep enough for several more ideally located, student and young professional apartment housing,” he says, “I think we’re just scratching the surface.