An approach is presented for flexible management of smart homes, covering both home automation and telecare. The aim is to allow end users to manage their homes without requiring detailed technical knowledge or programming ability. This is achieved at three levels: managing home components and their interactions, stating policies for how the home system should react to events, and defining high-level goals for what the user wishes to achieve. The component architecture is based on OSGi (Open Services Gateway initiative). Policies and goals are formulated in the APPEL language (Adaptable and Programmable Policy Environment and Language), and supported by the ACCENT policy system (Advanced Component Control Enhancing Network Technologies). At run-time, high-level goals lead to selection of an optimal and conflict-free set of policies. These in turn determine how the home should react to various events. The paper closes with an evaluation of the approach from the points of view of functionality and usability.