Minimising costs is one of the main objectives in public policy design. The formation of public institutions like TOKI (the Mass Housing Administration) that have financial and administrative power to plan and develop land for housing production aims to minimise costs. However, the effect of the advantages arising from TOKI's powers on transaction costs is unknown. This article examines TOKI's impact on transaction costs in planning and land development through the analysis and comparison of the transaction costs of two large-scale housing projects in Istanbul's Avcilar Ispartakule region (Mass Housing Area)-one developed by a public-private partnership (PPP) between Emlak Konut REIC (real estate developer, owned by TOKI) and a private sector actor and the other by a private sector actor alone. The findings of the study, rather than making generalisation, provide a relative comparison of the transaction costs, and identifies the cost-inducing activities in their processes. The findings indicate a disparity between the transaction costs related to the plan making process and the project development process of the two projects. TOKI's plan making process in the Mass Housing Area reduced transaction costs. However, the PPP appeared less efficient than the private sector project in the land development process. In particular, in partnering with the TOKI, time-related costs arose mainly in negotiations during the land acquisition and construction phases. The case study's findings, demonstrate a disconnect between TOKI's defined purpose to produce mass housing more efficiently and the high transaction costs incurred in the land development phase.