On a steep laneway in Vidigal, a Rio de Janeiro favela where gunfire between drug factions used to crackle with alarming frequency, another popping sound was heard from the road around lunchtime this week.

It was the metallic snap of a beer can being opened.

Three backpackers ambled by, wearing their knapsacks on their chests. The last among them hoisted a Brahma, the Brazilian lager, and sipped while walking downhill.

A backpacking tourist waits for a lift in the favela of Vidigal. (Matt Kwong/CBC)

The trio descended past Rosa Amalia Brito's canteen — an uncommon sight maybe five years ago in Vidigal, an informal settlement of about 30,000 people. These days, though, seeing foreigners roaming freely up and down this way isn't such a novelty.

Brito enjoys the company of the gringos (a term that's widely used in Brazil to describe any non-Brazilian in a non-offensive way). Many of them stay at the nearby five-storey Favela Experience hostel, which offers comforts such as complimentary breakfast, oceanfront views of the Atlantic, air-conditioned rooms and easy access to stunning beaches.

Favela Experience's hostel in Vidigal has an outdoor seating area, seen here from above. (Felipe Araujo/CBC)

Less welcome for Brito, however, are the economic effects wrought by "gentrificacao," or gentrification. She's witnessed an astonishingly fast transition in Vidigal over the last five years, going from a fearsome, gang-controlled collection of shelters into a tourist hotspot with sweeping views of Ipanema Beach.

'Price of everything has increased'

"This has become a different place. The price of everything has increased," Brito says. Market staples such as rice and beans have gone up, causing her to inflate her prices by a modest one real. A plate of home-made Portuguese stewed chicken, rice, beans, spaghetti and zucchini now costs 14 reais — about $5.85.

And those rental prices? "Absurdo," she says, noting that a ramshackle studio apartment in the area once went for no more than 500 reais ($208).

That same property has more than doubled to 1,100 reais a month. A one-bedroom house is 1,400 reais a month.

At the Favela Experience hostel, Montrealer Jessica McGovern concedes her roughly $80-a-night stay in Vidigal — even without running water for a shower in three days — has been 'a luxury version of favela.' (Matt Kwong/CBC)

The changes started with the aggressive policing program known as "pacification." The politically polarizing campaign stormed Vidigal in 2011, dramatically suppressing homicides. Before that, there had been periods of recurring firefights between rival gangs. At its worst, shootouts involved heavy machine guns, grenades and assault rifles.

Few at the time might have believed a police pacification program in Vidigal could work. But as a state presence became established here — one morning this week, a fleet of black-clad police motorbikers came rumbling through amid the moto-taxis — real-estate prices ballooned.

Art galleries have popped up. A new pizzeria opened by Italian expats has good buzz. And near the peak of Vidigal sits Mirante do Arvrao, a modern boutique hotel that opened in 2014 and boasts floor-to-ceiling windows, "airy rooms" and a "trendy" terrace bar, for about 650 reais ($271) a night.

Vidigal sits on a hillside in Rio de Janeiro. (Felipe Araujo/CBC)

A recent search for Airbnb listings in Vidigal showed 252 properties, with renters catering to "Olimpiadas" — guests seeking budget options for the Rio 2016 Games.

"We're never 100 per cent safe from a stray bullet," Vidigal resident Henrique da Silva, 26, says. "But compared to what it used to be, things are a lot better."

Adam Newman, the 27-year-old American CEO behind the Favela Experience hostel, runs the combination hospitality business, NGO and "social impact tourism company" out of Vidigal. He has 15 staff and just launched a new tour promo: 10 different favelas featuring 10 experiences in 10 days.

Maria Clara Dos Santos rents out her ramshackle home in the Rocinha favela, a neighbouring settlement to Vidagal that was once controlled by drug traffickers who frequently clashed with gangs in Vidagal. Her longest homestay guest was a German woman who stayed for over a year. (Matt Kwong/CBC)

The Colorado-born businessman is banking that foreigners curious about favelas will buy into the cultural exchange concept without being dissuaded by their

notoriety.

"People just think, 'Oh, Favela Experience tourism, that must be bad, it must be superficial, it must be safari tourism,' " he says, invoking tours run by other companies that bus people uphill to observe and photograph the local poverty. But 40 per cent of his revenues go towards an NGO that funds community English lessons, ballet classes and sustainability workshops, he says.

Satire spoofs favela 'safari tourism':

With pacification has come an industrialization of favela tourism, says Robert Muggah, a Brazil security expert with Rio policy think-tank the Igarape Institute.

"This idea of favela tourism, of favela chic, predates pacification," he says. "Now, small businesses have sprung up, tour guides have emerged. And so long as benefits are accrued by the people who get to live there, it can be a net positive."

But with the booming real-estate market in the favelas, residents are also being priced out. One irony of pacification, Muggah says, is that it bred new financial stresses on the impoverished citizens it was meant to lift up. Many services were once provided free by drug-trafficking organizations.

Adam Newman, CEO of Favela Experience, operates a hostel in Vidigal and also facilitates homestays in Rocinha. A cut of revenues from his favela tours go back to an NGO that serves the local community. (Matt Kwong/CBC)

"Litter removal, paying for light that was previously pirated from cables — now the utilities are charging people," he says.

No-go areas

Complexo do Alemao, a favela to the northwest, began moving more upmarket in the years following its 2010 pacification. In the ensuing four years, some 2,000 people migrated out and began building a new shantytown in an abandoned plastics factory.

Not all favelas are Vidigal, however. Further up the bluffs, parts of Alemao and Mare are often no-go areas for even local journalists and police. About three weeks ago, diners at a popular seafood restaurant and pub in the Babilonia favela were forced to duck for cover when shots rang out. Staff ushered clients into the kitchen to hide.

Bruno Goncalves calls Vidigal a 'success story.' It’s a good sign that gringos feel safe in its alleyways — something unthinkable a decade ago, he says. (Matt Kwong/CBC)

Police brutality is also a rising concern, more so for locals than tourists amid a program of "social cleansing."

Cesar Munoz, a researcher specializing on Brazil for Human Rights Watch, says killings by police are on the rise since 2014, often conducted with impunity. The last time he toured several favelas in April, he saw residents in Alemao toting assault rifles. He also interviewed police members who admitted to committing executions and torturing people.

"I've never done interviews like that in my life," Munoz says.

Regina Nunes, a Vidigal resident, says that though violence linked to drug trafficking has fallen since 'pacification' in 2011, locals now fear police abuses. (Matt Kwong/CBC)

On the whole, however, Vidigal is better than it was, if not perfect, says Regina Nunes. She wants the area to get more schools so older children don't have to leave the relative calm of their communities for education.

"When they get older they have to go to a different neighbourhood," Nunes says. "Parents get worried because their children have to come home when it's dark."