DEFINITION of 'Ghetto'

A run-down urban area primarily inhabited by a single minority group. Ghettos are often characterized by high unemployment, high crime, gang activity, inadequate municipal services, widespread drug use, high rates of dropout from school, broken families and an absence of businesses. As a result, real estate value in ghetto communities are generally much cheaper than in other communities.


Ghettos may be identifiable by physical characteristics such as large numbers of poorly maintained buildings, large amounts of graffiti, trash or debris accumulated in the street or on properties, and weedy vacant lots. Racial zoning laws, mortgage lending discrimination and income disparity contributed to the creation of many ghettos in the United States in the mid-20th that still persist to this day.

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