Cheap property prices in Blackpool could fuel a fresh influx of vulnerable people to the resort including convicts and drug addicts, councillors have been warned.
Landlords are buying cut-price accommodation to use as supported housing funded through housing benefit.
But some badly run schemes are proving a magnet for anti-social behaviour with police being called out to deal with repeated incidents.
Coun Lynn Williams said a supported housing scheme with up to 18 units in Claremont "was the number one reason for all police call outs."
Residents had been brought in from Wigan, but support was available only from 9am until 5pm Monday to Friday.
She added: "The manager had no idea of the number of police call outs.
"I think it is a massive problem because of the nature of making it a profitable business. But they are only making money if the scheme is not being run properly."
Because higher rents of up to £355 a week can be charged, the sector is attracting operators with the prospect of bigger profit margins.
But town hall chiefs fear it could lead to too many vulnerable people moving to Blackpool putting pressure on already stretched social services, increasing homelessness and triggering anti-social behaviour.
While much of the supported housing in Blackpool is managed by responsible operators, a meeting of the council's Adult Social Care and Health Scrutiny Committee heard many unscrupulous landlords were being drawn to the town by its low property prices.
Kate Aldridge, head of commissioning and corporate delivery, at the council said: "There are some good schemes but I think we are seeing an increase especially of landlords from other areas, attracted to Blackpool because of its low land values and the size of properties they can secure."
She said some landlords were looking to take over properties which could support up to 70 vulnerable people from across the North West.
Support and care could be as little as three hours per week.
The meeting heard problems had cropped up in areas including central Blackpool and South Shore.
The kind of tenants eligible to live in supported housing includes people recovering from drug or alcohol dependency, offenders and ex-offenders, people with mental ill health, youngsters leaving care and those at risk of domestic abuse.
A council report adds where proper support is not provided, properties "can become problematic within the neighbourhood".
While unruly tenants can be evicted, if they are from out of the area but have lived in Blackpool for more than six months, this can add to homelessness levels.
Rents are covered by housing benefit, but shortfalls may have to be met by the council which in the last two years has subsidised schemes by £1.2m.
Councillors agreed to refer their concerns to a task force which has been set up to explore how the council can use its powers including planning and licensing to better regulate the spread of supported housing.