An Assessment of U.S. Stream Compensatory Mitigation Policy: Necessary Changes to Protect Ecosystem Functions and Services

Compensatory mitigation of impacted streams and wetlands has increased over the past two decades, with the associated industry spending over US$2.9 billion in aquatic restoration annually. Despite these expenditures, evaluations by the National Research Council and U.S. Government Accountability Office have provided evidence that compensatory mitigation practices are failing to protect aquatic resource functions and services, and vague federal policy and inadequate evaluation of compensatory mitigation projects are to blame. To address these weaknesses, an update to federal regulations on compensatory mitigation was released in 2008. Additionally, the 2012 Reissuance of Nationwide Permits, some of which affects compensatory stream mitigation, was recently published. Current policy, as reflected in these documents, still uses nonspecific language to direct compensatory stream mitigation leaving most implementation decisions to the local U.S. Army Corps of Engineers district. The majority of federal mitigation policy has focused on wetland compensation, with other aquatic resources receiving less attention (e.g., streams). In this article, weaknesses of current policy are discussed, as are suggested policy changes to minimize the loss of stream ecosystem functions and services. Compensatory mitigation policy should clearly define key terms, incorporate adaptive management procedures, and provide guidelines for determining mitigation costs and compensation ratio requirements.     

Wetland loss and substitution by the Section 404 permit program in southern California,USA

To test the effectiveness of the 404 permit program in preventing a net loss of wetland resources, 75 Section 404 projects permitted in the years 1987–1989 and located in a portion of southern California were evaluated. From this group of projects, 80.47 ha of wetlands were affected by Section 404 permits and the Army Corps of Engineers required 111.62 ha of wetland mitigation. To verify the successful completion of each mitigation project, all 75 project sites were visited and evaluated based on the amount of dead vegetation, growth and coverage, and the number of invasive species. Based on the field verification results, the actual amount of completed mitigation area was 77.33 ha, resulting in a net loss of 3.14 ha of wetland resources in the years 1987–1989. By comparing the types of wetlands lost to the types of wetlands mitigated, it is apparent that, in particular, freshwater wetlands are experiencing a disproportionately greater loss of area and that riparian woodland wetlands are most often used in mitigation efforts. The net result of these accumulated actions is an overall substitution of wetland types throughout the region. Results also indicate that, typically, large-scale mitigation projects are more successful compared to smaller projects and that successful compliance efforts are not evenly distributed throughout the region. We recommend that better monitoring, mitigation in-kind, mitigation banking, and planning on a regional or watershed scale could greatly improve the effectiveness of the Section 404 permitting program.     

Land Use Planning and Social Equity in North Carolina’s Compensatory Wetland and Stream Mitigation Programs

The U.S. Clean Water Act requires compensatory mitigation for wetland and stream damage through restoration of damaged aquatic ecosystems. We evaluate the North Carolina’s Ecosystem Enhancement Program (EEP), a state agency responsible for compensatory mitigation. We compare communities gaining and losing aquatic resources during mitigation, finding new types of socioeconomic disparities that contradict previous studies of mitigation program behavior. We find average distances between impact and mitigation sites for streams (43.53 km) and wetlands (50.3 km) to be larger in North Carolina than in off-site mitigation programs in other regions previously studied. We also find that aquatic resources in the State are lost from urbanized areas that are more affluent, white, and highly educated, and mitigated at sites in rural areas that are less affluent, less well educated, and have a higher percentage of minorities. We also analyze the relationship between urban growth indicators and EEP accumulation of compensation sites. Growth indicators and long-term population projections are uncorrelated with both projected transportation impacts and advance mitigation acquired by the EEP, suggesting that growth considerations can be more effectively incorporated into the EEP’s planning process. We explore the possibility that spatial mismatches could develop between watersheds that are rapidly growing and those that are gaining mitigation. We make recommendations for ways that regulators incorporate growth indicators into the mitigation planning process.     

The Effect of Wetland Mitigation Banking on the Achievement of No-Net-Loss

/ This study determines whether the 68 wetland mitigation banks in existence in the United States through 1 January 1996 are achieving no-net-loss of wetland acreage nationally and regionally. Although 74% of the individual banks achieve no-net-loss by acreage, overall, wetland mitigation banks are projected to result in a net loss of 21,328 acres of wetlands nationally, 52% of the acreage in banks, as already credited wetland acreages are converted to otheruses. While most wetland mitigation banks are using appropriate compensation methods and ratios, several of the largest banks use preservation or enhancement, instead of restoration or creation. Most of these preservation/enhancement banks use minimum mitigation ratios of 1:1, which is much lower than ratios given in current guidelines. Assuming that mitigation occurs in these banks as preservation at the minimum allowable ratio, ten of these banks, concentrated in the western Gulf Coast region, will account for over 99% of projected net wetland acreage loss associated with banks. We conclude that wetland mitigation banking is a conceptually sound environmental policy and planning tool, but only if applied according to recently issued guidelines that ensure no-net-loss of wetland functions and values. Wetland mitigation banking inevitably leads to geographic relocation of wetlands, and therefore changes, either positively or negatively, the functions they perform and ecosystem services they provide. KEY WORDS: Mitigation banking; Wetlands; Army Corps of Engineers; No-net-loss     

Wetland Mitigation Compliance in the Western Upper Peninsula of Michigan

The Army Corps of Engineers (ACE) is generally responsible for the implementation of federal Clean Water Act wetland regulations. It therefore plays an important role in the protection of wetlands within the United States. Unfortunately, past evaluators of ACEs implementation of these regulations found low rates of regulatory compliance. However, the fact that two states have taken responsibility for the implementation of these regulations within their boundaries provided the opportunity to assess whether one of these states might be doing a better job of enforcement. This paper reports on compliance with some of these regulations within one Michigan region. We evaluated permittee compliance with paperwork filing requirements related to wetland mitigation projects. Sixty-seven percent of county road commission permittees were out of compliance with at least one filing requirement. Forty percent of private and non-county government permittees were out of compliance. Our results therefore suggest that serious problems exist with Michigans implementation of wetland regulations. They do not suggest that compliance in this state is significantly better than in states under ACE administration. We believe that increased agency monitoring and enforcement would improve compliance.     

Compliance with Wetland Mitigation Standards in the Upper Peninsula of Michigan, USA

The United States has lost about half its wetland acreage since European settlement, and the effectiveness of current wetland mitigation policies is often questioned. In most states, federal wetland laws are overseen by the U.S. Army Corps of Engineers, but Michigan administers these laws through the state's Department of Environmental Quality (MDEQ). Our research provides insight into the effectiveness of the state's implementation of these laws. We examined wetland mitigation permit files issued in Michigan's Upper Peninsula between 2003 and 2006 to assess compliance with key MDEQ policies. Forty-six percent of files were out of compliance with monitoring report requirements, and forty-nine percent lacked required conservation easement documents. We also conducted site assessments of select compensatory wetland projects to determine compliance with MDEQ invasive plant species performance standards. Fifty-five percent were out of compliance. We found no relationship between invasive species noncompliance and past site monitoring, age of mitigation site, or proximity to roads. However, we found wetland restoration projects far more likely to be compliant with performance standards than wetland creation projects. We suggest policy changes and agency actions that could increase compliance with wetland restoration and mitigation goals.     

Federal and state management of inland wetlands: Are states ready to assume control?

As inland wetlands face increasing pressure for development, both the federal government and individual states have begun reevaluating their respective wetland regulatory schemes. This article focuses first on the effectiveness of the past, present, and proposed federal regulations, most notably the Section 404, Dredge and Fill Permit Program, in dealing with shrinking wetland resources. The article then addresses the status of state involvement in this largely federal area, as well as state preparedness to assume primacy should federal priorities change. Finally, the subject of comprehensive legislation for wetland protection is investigated, and the article concludes with some procedural suggestions for developing a model law.     

Does Wetland Location Matter When Managing Wetlands for Watershed‐Scale Flood and Drought Resilience?

Wetland protection and restoration strategies that are designed to promote hydrologic resilience do not incorporate the location of wetlands relative to the main stream network. This is primarily attributed to the lack of knowledge on the effects of wetland location on wetland hydrologic function (e.g., flood and drought mitigation). Here, we combined a watershed‐scale, surface–subsurface, fully distributed, physically based hydrologic model with historical, existing, and lost (drained) wetland maps in the Nose Creek watershed in the Prairie Pothole Region of North America to (1) estimate the hydrologic functions of lost wetlands and (2) estimate the hydrologic functions of wetlands located at different distances from the main stream network. Modeling results showed wetland loss altered streamflow, decreasing baseflow and increasing stream peakflow during the period of the precipitation events that led to major flooding in the watershed and downstream cities. In addition, we found that wetlands closer to the main stream network played a disproportionately important role in attenuating peakflow, while wetland location was not important for regulating baseflow. The findings of this study provide information for watershed managers that can help to prioritize wetland restoration efforts for flood or drought risk mitigation.     

An Evaluation of Vernal Pool Creation Projects in New England: Project Documentation from 1991–2000

Vernal pools are vulnerable to loss through development and agricultural and forestry practices owing to their isolation from open water bodies and their small size. Some vernal pool-dependent species are already listed in New England as Endangered, Threatened, or Species of Special Concern. Vernal pool creation is becoming more common in compensatory mitigation as open water ponds, in general, may be easier to create than wooded wetlands. However, research on vernal pool creation is limited. A recent National Research Council study (2001) cites vernal pools as challenging to recreate. We reviewed documentation on 15 vernal pool creation projects in New England that were required by federal regulatory action. Our purpose was to determine whether vernal pool creation for compensatory mitigation in New England replaced key vernal pool functions by assessing project goals and documentation (including mitigation plans, pool design criteria, monitoring protocols, and performance standards). Our results indicate that creation attempts often fail to replicate lost pool functions. Pool design specifications are often based on conjecture rather than on reference wetlands or created pools that function successfully. Project monitoring lacks consistency and reliability, and record keeping by regulatory agencies is inadequate. Strengthening of protection of isolated wetlands in general, and standardization across all aspects of vernal pool creation, is needed to ensure success and to promote conservation of the long-term landscape functions of vernal pools.     

Inventorying and Monitoring Wetland Condition and Restoration Potential on a Watershed Basis with Examples from Spring Creek Watershed, Pennsylvania, USA

We developed an approach for inventorying wetland resources, assessing their condition, and determining restoration potential in a watershed context. This article outlines how this approach can be developed into a Wetland Monitoring Matrix (WMM) that can help resource management agencies make regulatory and nonregulatory decisions. The WMM can be embedded in a standard planning process (Wetlands, Wildlife, and Watershed Assessment Techniques for Evaluation and Restoration, or W³ATER) involving the setting of objectives, assessing the condition of the resource, prioritizing watersheds or sites, implementing projects, and evaluating progress. To that process we have added the concepts of reference, hydrogeomorphic (HGM) classification, and prioritization for protection and restoration by triage or adaptive management. Three levels of effort are possible, increasing in detail and diagnostic reliability as data collection shifts from remote sensing to intensive sampling on the ground. Of key importance is the use of a consistent set of monitoring protocols for conducting condition assessments, designing restoration and creation projects, and evaluating the performance of mitigation projects; the same variables are measured regardless of the intended use of the data. This approach can be tailored to any region by establishing a reference set of wetlands organized by HGM subclasses, prioritizing watersheds and individual wetlands, and implementing consistent monitoring protocols. Application of the approach is illustrated with examples from wetlands and streams of the Spring Creek Watershed in central Pennsylvania, USA.     

Review and comparison of wetland impacts and mitigation requirements between New Jersey,USA, Freshwater Wetlands Protection Act and Section 404 of the Clean Water Act

A review of wetland impacts authorized under the New Jersey Freshwater Wetlands Protection Act (FWPA) was conducted based on permitting data compiled for the period 1 July 1988 to 31 December 1993. Data regarding the acreage of wetlands impacted, location of impacts by drainage basin and watershed, and mitigation were analyzed. Wetland impacts authorized and mitigation under New Jersey's program were evaluated and compared with Section 404 information available for New Jersey and other regions of the United States.Under the FWPA, 3003 permits were issued authorizing impacts to 234.76 ha (602.27 acres) of wetlands and waters. Compensatory mitigation requirements for impacts associated with individual permits required the creation of 69.20 ha. (171.00 acres), and restoration of 16.49 ha (40.75 acres) of wetlands. Cumulative impacts by watershed were directly related to levels of development and population growth.The FWPA has resulted in an estimated 67% reduction [44.32 ha (109.47 acres) vs 136.26 ha (336.56 acres)] in annual wetland and water impacts when compared with Section 404 data for New Jersey. For mitigation, the slight increase in wetland acreage over acreage impacted is largely consistent with Section 404 data.Based on this evaluation, the FWPA has succeeded in reducing the level of wetland impacts in New Jersey. However, despite stringent regulation of activities in and around wetlands, New Jersey continues to experience approximately 32 ha (79 acres) of unmitigated wetland impacts annually. Our results suggest that additional efforts focusing on minimizing wetland impacts and increasing wetlands creation are needed to attain a goal of no net loss of freshwater wetlands.     

Compensatory Stream and Wetland Mitigation in North Carolina: An Evaluation of Regulatory Success

Data from a probability sample were used to estimate wetland and stream mitigation success from 2007 to 2009 across North Carolina (NC). “Success” was defined as whether the mitigation site met regulatory requirements in place at the time of construction. Analytical results were weighted by both component counts and mitigation size. Overall mitigation success (including preservation) was estimated at 74 % (SE = 3 %) for wetlands and 75 % (SE = 4 %) for streams in NC. Compared to the results of previous studies, wetland mitigation success rates had increased since the mid-1990s. Differences between mitigation providers (mitigation banks, NC Ecosystem Enhancement Program’s design-bid-build and full-delivery programs, NC Department of Transportation and private permittee-responsible mitigation) were generally not significant although permittee-responsible mitigation yielded higher success rates in certain circumstances. Both wetland and stream preservation showed high rates of success and the stream enhancement success rate was significantly higher than that of stream restoration. Additional statistically significant differences when mitigation size was considered included: (1) the Piedmont yielded a lower stream mitigation success rate than other areas of the state, and (2) recently constructed wetland mitigation projects demonstrated a lower success rate than those built prior to 2002. Opportunities for improvement exist in the areas of regulatory record-keeping, understanding the relationship between post-construction establishment and long-term ecological trajectories of stream and wetland restoration projects, incorporation of numeric ecological metrics into mitigation monitoring and success criteria, and adaptation of stream mitigation designs to achieve greater success in the Piedmont.     

Evaluating cumulative effects on wetland functions: A conceptual overview and generic framework

This article outlines conceptual and methodological issues that must be confronted in developing a sound scientific basis for investigating cumulative effects on freshwater wetlands. We are particularly concerned with: (1) effects expressed at temporal and spatial scales beyond those of the individual disturbance, specific project, or single wetland, that is, effects occurring at the watershed or regional landscape level; and (2) the scientific (technical) component of the overall assessment process. Our aim is to lay the foundation for a research program to develop methods to quantify cumulative effects of wetland loss or degradation on the functioning of interacting systems of wetlands. Toward that goal we: (1) define the concept of cumulative effects in terms that permit scientific investigation of effects; (2) distinguish the scientific component of cumulative impact analysis from other aspects of the assessment process; (3) define critical scientific issues in assessing cumulative effects on wetlands; and (4) set up a hypothetical and generic structure for measuring cumulative effects on the functioning of wetlands as landscape systems.We provide a generic framework for evaluating cumulative effects on three basic wetland landscape functions: flood storage, water quality, and life support. Critical scientific issues include appropriate delineations of scales, identification of threshold responses, and the influence on different functions of wetland size, shape, and position in the landscape.The contribution of a particular wetland to landscape function within watersheds or regions will be determined by its intrinsic characteristics, e.g., size, morphometry, type, percent organic matter in the sediments, and hydrologic regime, and by extrinsic factors, i.e., the wetland's context in the landscape mosaic. Any cumulative effects evaluation must take into account the relationship between these intrinsic and extrinsic attributes and overall landscape function. We use the magnitude of exchanges among component wetlands in a watershed or larger landscape as the basis for defining the geographic boundaries of the assessment. The time scales of recovery for processes controlling particular wetland functions determine temporal boundaries. Landscape-level measures are proposed for each function.     

Trends and patterns in section 404 permitting requiring compensatory mitigation in Oregon and Washington,USA

The effects of permitting decisions made under Section 404 of the Clean Water Act for which compensatory mitigation was required were examined. Information was compiled on permits issued in Oregon (January 1977–January 1987) and Washington (1980–1986). Data on the type of project permitted, wetland impacted, and mitigation project were collected and analyzed. The records of the Portland and Seattle District Offices of the US Army Corps of Engineers and of Environmental Protection Agency Region X were the primary sources of information. The 58 permits issued during the years of concern in Oregon document impacts to 82 wetlands and the creation of 80. The total area of wetland impacted was 74 ha while 42 ha were created, resulting in a net loss of 32 ha or 43%. The 35 permits issued in Washington document impacts to 72 wetlands and the creation of 52. The total area of wetland impacted was 61 ha while 45 ha were created, resulting in a net loss of 16 ha or 26%. In both states, the number of permits requiring compensation increased with time. The area of the impacted and created wetlands tended to be ≤0.40 ha. Permitted activity occurred primarily west of the Cascade Mountains and in the vicinity of urban centers. Estuarine and palustrine wetlands were impacted and created most frequently. The wetland types created most often were not always the same as those impacted; therefore, local gains and losses of certain types occurred. In both states the greatest net loss in area was in freshwater marshes. This study illustrates how Section 404 permit data might be used in managing a regional wetland resource. However, because the data readily available were either incomplete or of poor quality, the process of gathering information was very labor intensive. Since similar analyses would be useful to resource managers and scientists from other areas, development of an up-to-date standardized data base is recommended.     

Wetland ecological and compliance assessments in the San Francisco Bay Region, California, USA

The San Francisco Bay Region of the California Regional Water Quality Control Board (SFB CRWQCB) and the San Francisco District of the US Army Corps of Engineers (US ACOE) are looking for an expeditious means to determine whether regulated wetland projects produce ecologically valuable systems and remain in compliance with their permits (i.e. fulfill their legal requirements) until project completion. A study was therefore undertaken in which 20 compensatory wetland mitigation projects in the San Francisco Bay Region were reviewed and assessed for both permit compliance and habitat function, and this was done using a rapid assessment method adapted for this purpose. Thus, in addition to determining compliance and function, a further goal of this study was to test the efficacy of the assessment method, which, if useful, could be applied not only to mitigation projects, but also to restoration projects and natural wetland systems. Survey results suggest that most projects permitted 5 or more years ago are in compliance with their permit conditions and are realizing their intended habitat functions. The larger restoration sites or those situated between existing wetland sites tend to be more successful and offer more benefits to wildlife than the smaller isolated ones. These results are consistent with regulatory experience suggesting that economies of scale could be realized both with (1) large scale regional wetland restoration sites, through which efforts are combined to control invasive species and share costs, and (2) coordinated efforts by regulatory agencies to track project information and to monitor the increasing number and size of mitigation and restoration sites. In regard to the assessment methods, we find that their value lies in providing a consistent protocol for evaluations, but that the ultimate assessment will rely heavily on professional judgment, regulatory experience, and the garnering of pre-assessment information.     

Land use in Korean tidal wetlands: impacts and management strategies

The coastal landscapes in southwestern Korea include a diverse array of tidal wetlands and salt marshes. These coastal zones link the ecological functions of marine tidal wetlands and freshwater ecosystems with terrestrial ecosystems. They are rich in biological diversity and play important roles in sustaining ecological health and processing environmental pollutants. Korean tidal wetlands are particularly important as nurseries for economically important fishes and habitats for migratory birds. Diking, draining, tourism, and conversion to agricultural and urban uses have adversely affected Korean tidal wetlands. Recent large development projects have contributed to further losses. Environmental impact assessments conducted for projects affecting tidal wetlands and their surrounding landscapes should be customized for application to these special settings. Adequate environmental impact assessments will include classification of hydrogeomorphic units and consideration of their responses to biological and environmental stressors. As is true worldwide, Korean laws and regulations are changing to be more favorable to the conservation and protection of tidal wetlands. More public education needs to be done at the local level to build support for tidal wetland conservation. Some key public education points include the role of tidal wetlands in maintaining healthy fish populations and reducing impacts of nonpoint source pollution. There is also a need to develop procedures for integrating economic and environmental objectives within the overall context of sustainable management and land uses.     

State wetlands and riparian area protection programs

The protection of wetlands and riparian areas has emerged as an important environmental planning issue. In the United States, several federal and state laws have been enacted to protect wetlands and riparian areas. Specifically, the federal Clean Water Act includes protection requirements in Sections 301 and 303 for state water quality standards, Section 401 for state certification of federal actions (projects, permits, and licenses), and Section 404 for dredge and fill permits. The Section 401 water quality state certification element has been called the “sleeping giant” of wetlands protection because it empowers state officials to veto or condition federally permitted or licensed activities that do not comply with state water quality standards. State officials have used this power infrequently. The purpose of this research was to analyze the effectiveness of state wetland and riparian programs. Contacts were established with officials in each state and in the national and regional offices of key federal agencies. Based on interviews and on a review of federal and state laws, state program effectiveness was analyzed. From this analysis, several problems and opportunities facing state wetland protection efforts are presented.     

Wetlands mitigation: Partnership between an electric power company and a federal wildlife refuge

Nine hectares (23 acres) of a degraded section of Patuxent Research Refuge in Laurel, Maryland, USA, were converted to wetland habitat by the Baltimore Gas and Electric Company in 1994. The wetlands were created as mitigation for 5.7 ha (14 acres) of wetlands that were impacted as part of the construction of an 8.5-km (5.3-mile) 500-kV overhead transmission line on the refuge. The area consists of a created forested wetland of 5.5 ha (13.5 acres), a seasonally inundated green-tree reservoir of 7.6 ha (6.5 acres), and an impounded pond wetland of 1.2 ha (3 acres). Construction included the planting of 6131 trees, 4276 shrubs, and 15,102 emergent plants. Part of the site has been studied intensively since completion and survival of trees and shrubs after two years was 88%. Measurements of these transplants have shown growth greater than on other created sites in Maryland. Grasses and other herbaceous vegetation were dominant plants in the meter-square plots in the first two years of sampling of the created forested wetland. Wildlife surveys for birds, mammals, amphibians, and reptiles have revealed diverse communities. Although these communities represent species consistent with open habitat, more typical forest species should colonize the area as it undergoes succession into a more mature forested wetland. The creation, management, and research of this mitigation site represents an excellent example of a partnership between a private electric power company and a federal wildlife refuge. This partnership has increased local biodiversity and improved regional water quality of the Patuxent River and the Chesapeake Bay.     

Community Structure and Quality After 10 Years in Two Central Ohio Mitigation Bank Wetlands

We evaluate two 10-year-old mitigation bank wetlands in central Ohio, one created and one with restored and enhanced components, by analysis of vegetation characteristics and by comparison of the year-10 vegetation and macroinvertebrate communities with reference wetlands. To assess different measures of wetland development, we compare the prevalence of native hydrophytes with an index of floristic quality and we evaluate the predictability of these parameters in year 10, given 5 years of data. Results show that the mitigation wetlands in this study meet vegetation performance criteria of native hydrophyte establishment by year 5 and maintain these characteristics through year 10. Species richness and floristic quality, as well as vegetative similarity with reference wetlands, differ among mitigation wetlands in year 1 and also in their rate of change during the first 10 years. The prevalence of native hydrophytes is reasonably predictable by year 10, but 5 years of monitoring is not sufficient to predict future trends of floristic quality in either the created or restored wetland. By year 10, macroinvertebrate taxa richness does not statistically differ among these wetlands, but mitigation wetlands differ from reference sites by tolerance index and by trophic guild dominance. The created wetland herbivore biomass is significantly smaller than its reference, whereas detritivore biomass is significantly greater in the created wetland and smaller in the restored wetland as compared with respective reference wetlands. These analyses illustrate differences in measures of wetland performance and contrast the monitoring duration necessary for legal compliance with the duration required for development of more complex indicators of ecosystem integrity.     

Compensatory Mitigation for Streams Under the Clean Water Act: Reassessing Science and Redirecting Policy1

Doyle, Martin W. and F. Douglas Shields, 2012. Compensatory Mitigation for Streams Under the Clean Water Act: Reassessing Science and Redirecting Policy. Journal of the American Water Resources Association (JAWRA) 48(3): 494-509. DOI: 10.1111/j.1752-1688.2011.00631.x Abstract: Current stream restoration science is not adequate to assume high rates of success in recovering ecosystem functional integrity. The physical scale of most stream restoration projects is insufficient because watershed land use controls ambient water quality and hydrology, and land use surrounding many restoration projects at the time of their construction, or in the future, do not provide sufficient conditions for functional integrity recovery. Reach scale channel restoration or modification has limited benefits within the broader landscape context. Physical habitat variables are often the basis for indicating success, but are now increasingly seen as poor surrogates for actual biological function; the assumption “if you build it they will come” lacks support of empirical studies. If stream restoration is to play a continued role in compensatory mitigation under the United States Clean Water Act, then significant policy changes are needed to adapt to the limitations of restoration science and the social environment under which most projects are constructed. When used for compensatory mitigation, stream restoration should be held to effectiveness standards for actual and measurable physical, chemical, or biological functional improvement. To achieve improved mitigation results, greater flexibility may be required for the location and funding of restoration projects, the size of projects, and the restoration process itself.