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The favela is fundamentally different from inner-city slums and tenements (the type of poor people's housing prevalent in the developed world). However, due to the disparate distribution of wealth in Brazil, the term favela is widely used to refer to both Shanty Towns and Slums.
Shanty Towns, comparing to Slums, are units of irregular self-constructed housing built on terrain seized and occupied illegally --usually on lands belonging to third parties, most often located in the urban periphery. Residences are built without license, with poor or no sanitation. Inside the favela there is a near total absence of numbered streets, sanitation networks, electricity, telephones, or plumbing.
These areas of irregular and poor quality housing, are often crowded onto hillsides. Accidents, mainly from heavy rainfall, are frequent in such areas. Favelas are often troubled by drug-related crime and gang warfare. Rumor has it that common social codes in favelas forbid residents from engaging in criminal activity while inside their own favela. Favelas are often considered a disgrace to the country.
The first favelas appeared in Rio during Brazil's Rural Exodus period in the 1960s, where many people from the rural areas came to Rio (then the Capital of Brazil) looking for work. When immigrants found that they couldn't sustain a decent quality of life in the developed cities, even while having a permanent job, they had to resign to live in the favelas.
Most people that live in favelas are poor (and some are below the poverty line), living on less than US$100 per month. Brazil's favelas can be seen as a consequence of the highly disparate distribution of wealth in the country.
The most famous favelas are those in and around Rio de Janeiro, where they provide a sharp juxtaposition of poverty and wealth when considered side-by-side with the luxurious apartment buildings and mansions of Rio's elite.
Săo Paulo also has a great number of favelas.The 2002 film City of God put a spotlight on favelas, chronicling the cycle of poverty, violence, and despair in a Rio de Janeiro slum.
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