The most common and most likely answer to this crossword clue is the 6 letter word FAVELA
I've seen this crossword clue in Financial Times
F
A
V
E
L
A
More clues leading to the result FAVELA
- Ramshackle town best-loved by half-cut lags
- . Shantytown preferred over city
- Following hail, large area becomes slum
- Way into Florida slum
- Preferred US city, seeing Brazilian shantytown
- Virtually standard to embrace prayer in shanty town
- Slum preferred over US city
- Most cherished US state, where gun crime and drug trafficking are rife
- Poorest area of best-loved city
- Favourite city slum
Buddy explains!

The straight part
We know that "shanty town" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case shanty town = favela.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
Crossword Answer definitions
FAVELA noun- A slum or shantytown, especially in Brazil