They didn’t quite hug, but they were happy, and some of them definitely cheered.

In an emotionally draining meeting Tuesday to decide the City of Santa Barbara’s $577 million budget, the City Council found a way to set aside $5 million for affordable housing for the next two years.

Several community organizations pressured the city to fund housing, citing soaring rents across the region.

For more than three years, Councilwoman Meagan Harmon has led the effort to use reserve funds for affordable housing, instead of letting the money sit idle in a savings account, and managed to pull together a coalition to support the effort, although the votes on Tuesday were not unanimous.

Harmon said the decision to find $5 million for affordable housing shows the city’s values and character.

“It’s more important than ever that we put together something that does show one another that we care for each other and that we do have an aspirational vision for this city that goes beyond just the everyday, and something bigger,” Harmon said. “That’s who we are in Santa Barbara, and I think we’ve gotten just about as close to that in this budget as we possibly could this year.”

Most of the political conversation centered on whether to fund affordable housing with $5 million, where the money should come from and for how long.

Going into Tuesday’s meeting, the city staff had proposed placing $1.5 million into the Flexible Housing and Homelessness Fund and $1.5 million into the Local Housing Trust Fund. On top of that, the council decided to add $2 million from contingency reserves into the Local Housing Trust Fund to fund affordable housing.

The vote was 6-1, with Mayor Randy Rowse opposing, to set aside the money for the 2026 fiscal year. The vote was 4-3 to set aside the money for 2027, with Rowse and Councilmen Eric Friedman and Mike Jordan opposing.

Friedman earlier in the day, at the city’s Finance Committee meeting, backed Harmon’s idea to spend reserve funds, but only for 2026, not 2027. He said there is too much uncertainty in Washington, D.C. Threats to cut Community Development Block Grants could hurt or put nonprofit organizations out of business, he said, and the city would then need to step in and fill the human services gap.

He also said that the unrest in Los Angeles will hurt Santa Barbara and California tourism.

“There is concern with what is happening in LA and the irresponsible use of the National Guard in those ways that it is actually going to hurt California as a whole in tourism, which will hurt us,” Friedman said.

He said he wants to see how things play out in the next six months before deciding on 2027.

Rowse said committing reserves to something new “doesn’t make sense to me.”

“I certainly don’t want to commit reserve funding toward something I am not really sure we are going to be able to do,” he said. “There’s a ton of uncertainty out there right now,” and that “flexibility may mean having those reserves topped up when we need them.”

Jordan said the desperation the city feels over how to fund affordable housing is self-inflicted.

“Part of this is our fault,” he said. “We need to look in the mirror.”

Santa Barbara’s design standards and planning rules block affordable housing, he said.

“There are opportunities to find partners to build low-income affordable housing, but our city standards and design guidelines get in the way,” Jordan said.

Things such as the need for a housing development to have red tile roofs and stucco, or the city’s height limit, slow down the production of affordable housing.

“The choice of this moral or ethical obligation to take care of those who are under housing stresses being circumvented by the way we have to have Santa Barbara look and feel is totally out of sync with me,” Jordan said. “There has to be a way to work on this and get it to an acceptable point and not just using 150-year-old or 100-year-old design standards in the city of Santa Barbara while people are living on the street or being tossed out of their houses.”

Jordan also said the city hasn’t done anything to re-establish a consistent affordable housing fund after the state legislature abolished local redevelopment agencies, which served as a funding mechanism for affordable housing and other city projects.

Councilwoman Kristen Sneddon said she supports taking the money from reserves as long as there is a plan to replenish those funds next year. She highlighted other positives of the budget, including zero cuts to services.

She thanked the community for voting for the half-cent sales tax increase last year, which took Santa Barbara out of a multimillion-dollar budget shortfall.

“I am very excited that there seems to be a way to have it all,” Sneddon said.

Although he ended voting in favor of using reserves, Councilman Oscar Gutierrez, who is normally subdued in his comments, spoke out strongly about President Trump and his concerns about how the president’s actions could hurt Santa Barbara.

“Considering what is going on less than two hours away from us, that’s an indicator, in my opinion, of what’s to come,” Gutierrez said.

He said the No. 1 generator of money in Santa Barbara is tourism.

“When you acknowledge that our president just banned multiple countries from visiting us, when you think about all the press about what is happening in Los Angeles, that is going to turn people off from visiting our state and therefore visiting our community,” Gutierrez said. “That’s going to affect the amount of money that we are going to be generating.”

He said using reserve funds “when we are dealing with the most volatile president of our lifetime makes me really nervous, like really, really nervous,” Gutierrez said.