In Brazil, a shanty-town is called a favela. When I was growing up in South America (the 1970s and 1980s), shacks in the shanties were typically made of plywood, cardboard, and corrugated tin.

Here’s a photo of good-sized favela in Rio today that I found on the web. A few things to note…

1. Its on a hill. In the US, homes on a hillside are often more expensive because they command a view. I believe in Brazil, the government often refuses to allow private ownership of a lot of hillside property (someone correct me on this please) because of the danger of landslides. Thus, the poor, who have no other place to go, end up building their homes on hills.
2. The homes are now made of bricks and concrete. After existing for long enough, its become virtually impossible for the government to evict the squatters. Once a de facto property right exists, it becomes worth the time, effort, and expenditure to build using better materials than plywood, cardboard, and corrugated tin. Also… many of the homes have two and three stories. By the time a squatter got his/her “property rights” he or she already had neighbors – the only direction to expand was vertically.
3. The danger of landslides continues to exist. Many poor people die in these landslides every year. But you don’t have the spectacle of taxpayers repeatedly bailing out the owners of multi-million dollar homes in Malibu.
4. The view from the favela is spectacular. This particular favela, if memory serves, is close to the old Sheraton… between the Leblon and Sao Conrado beaches. (Leblon is separated from the famous Ipanema beach by a canal, but is a much more livable neighborhood than Ipanema. The most expensive apartment building in Rio sits in Leblon, across the street from the beach. Sao Conrado also boasts some of the most expensive apartment buildings in the city.)

More photos from the same website.

Update… Note, with respect to item 4… not all favelas have such a view. In fact, evn from most shantytowns in Rio, the view sucks. Go somewhere like Sao Paulo and its worse.

Update 2 – Question… Anyone have any guesses as to why the very poor in neighboring countries, say, Argentina and Uruguay, historically seem to have better homes than those in Brazil? Its something I’ve always wondered.