Non-profits also confront marketability, feasibility and financing problems that usually deter for-profit developers.

Very few for-profit developers, and none of the hotel chains, truly understand the elderly housing industry, or how to provide health-care or life-care services.

You state that many for-profit developers are nervous about managing health-care costs and do not offer continuing care services, or a lifetime care program.

Another proposal would seek to spur private development of housing for the elderly by easing rules on for-profit developers.

Investment houses market the credits to investors on behalf of both for-profit and nonprofit developers.

"It was meant to stop for-profit developers of affordable housing from being tax-exempt," he said.

Mr. Halaby's solution is "to discourage for-profit developers by doing it ourselves."

And so the Giuliani administration, weaving together older and newer housing programs, has been recruiting for-profit and nonprofit developers to make over entire blocks.

Meanwhile, most for-profit developers say they cannot build housing affordable to moderate- or low-income people without some public subsidies.

In the Home Works approach, the housing agency contracts directly with local nonprofit development companies, for-profit developers or joint ventures of the two.