system
Given the following post, respond as if you're commenting on Reddit:
human
Why is rent control a bad thing?

I don't understand economics like I probably should and i'm having trouble understanding why rent control is a bad thing. I live in Saskatchewan if that makes a difference.
gpt
One of the main reason capitalism works is that prices somewhat accurately reflect supply and demand. Rent control takes away this information. As a result, there isn't the same incentive to create new developments. Less new development means less supply, which would increase prices, but they're kept artificially low which compounds the problem. You end up with a situation where the government then has to step in to create new housing, because businesses don't find it profitable.

How disastrous it ends up depends on how out of tune the government rent control is with what the open market prices would have been. This isn't like banking regulations or employment insurance though, it's a reduction of information that never ends well.