Why do I get an error trying to install plugins on my WP in IIS7?

I get the following error whenever I try to install plugins from my local server:

Downloading install package from https://premium.wpmudev.org/wdp-un.php?action=install&key=fd806c5bdde5b35b73ae733de8f7f1bf650fb85c&pid=63…

Download failed. Destination directory for file streaming does not exist or is not writable.

I have set the proper permissions on the installation folder and have even tried giving everyone full control. Do I manually need to create a folder or something?