Construction sector is usually accepted as the engine that triggers economic growth due to its strong backward and forward linkages with other sectors. On the other hand, it is also argued that increased construction activity could end up with negative economic, social and environmental impacts. The literature emphasizes the role of public sector, especially the national governments in minimizing the negative impacts of construction activity. The related arguments mostly postulate that public sector is well aware of the environmental challenges caused by construction activity and devoted to the understanding of how to improve the sustainability performance of private developers. Yet the case of Turkey provides significant evidences to question these assumptions. In this respect, this paper elaborates on the negative impacts of increased construction activity in Turkey and argues the role of public sector in intensification of the negative environmental effects through deregulation on urban planning and housing production by public agencies. The findings of the research highlight the importance of sustainable construction and verify the need for mainstreaming of sustainable construction into public policy-making at national and local levels, especially in developing countries, where most, if not all, of the future urban population growth will take place. (C) 2011 Elsevier Ltd. All rights reserved.