This report, one of series of reports describing innovative practices in integrating people with disabilities into community life, presents the findings of a study of privately operated community living arrangements funded by the Connecticut Department of Mental Retardation. It addresses three questions: (1) are the costs of the most expensive privately operated community living arrangements justifiable? (2) do people living in privately operated community living arrangements receive more or less supervision than they require? and (3) does the design of privately operated community living arrangements allow for sufficient flexibility to meet the needs of people with mental retardation. Major conclusions are that the costs of these programs are justifiable and comparable to those of public programs, that most living arrangements provide more supervision than their clients require, and that private community living facilities have lacked flexibility and individualization. Appendixes present the evaluation methodology and two article reprints, "Common Issues in Family Care" (Steven Taylor and Julie Ann Racino) and "Supporting Adults with Disabilities in Individualized Ways in the Community" (Julie Ann Racino). Includes 11 references. (DB)