Poor area by Rio? Preferred North American city (6)

I believe the answer is:

favela

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'poor area by rio?' is the definition.
(a favela is a Brazilian shanty town)

'preferred north american city' is the wordplay.
'preferred north' becomes 'fave' (I can't explain this - if you can you should believe this answer much more).
'american city' becomes 'la' (abbreviation for Los Angeles).
'fave'+'la'='FAVELA'

Can you help me to learn more?

(Other definitions for favela that I've seen before include "Brazilian slum" , "(Brazilian) shack, shanty town; Alf, Eva (anag.)" , "Shanty town, especially in Brazil" , "Shantytown in Brazil" , "Ramshackle town" .)

I've seen this clue in The Times.

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