A $40 million windfall in federal funds is allowing the City Council to help thousands more families stay in their homes now and still set aside money for affordable housing construction in the future.

Spending to ease the short-term crisis caused by the pandemic versus funding long-term solutions to the housing problem has been a major point of contention among council members.

Thursday, the council voted narrowly to do both.

Earlier this month, City Manager Erik Walsh estimated the city would be getting about $6 million for emergency housing assistance as a result of the economic havoc caused by the pandemic.

Instead, the city was awarded $46.7 million, which can help an additional 18,000 families keep roofs over their heads.

“This will help us address the need in our community and help keep people housed as we continue to respond and recover through the pandemic,” Assistant City Manager Lori Houston said.

At least 90 percent of the $46.7 million must be used for direct financial assistance, including rent and utilities. The rest can be used for housing stability services, Walsh said.

“This additional funding from the U.S. Treasury is one more step toward ensuring we keep people in their homes during a time when it matters most,” District 1 Councilman Roberto Treviño said. “Funds like this will strengthen the social safety net that is needed to keep our community safe during this pandemic.”

Demand for housing assistance has risen exponentially since the onset of the pandemic. About 5,500 people have applied for assistance every month for the last three months, Houston said.

Before the pandemic, the city allocated $1 million a year to its risk mitigation fund to help about 40 households with housing expenses per month. At the time, the program was receiving about 230 calls a month, Houston said.

Details on how the new money will be allocated still have to be worked out. The City Council will vote on the specific plans in early February.

In the meantime, the city is using other funding sources to add $10.1 million to the emergency housing assistance program to help 4,000 households, Houston said. That’s in addition to the 18,000 that are expected to be helped starting next month with the new money.

About $3.9 million of the $10.1 million was funded through the Texas Emergency Rental Assistance Program, and $1.5 million came from Bexar County’s general fund.

Originally, another $7.7 million was expected to come from CARES Act funds to boost the emergency housing program but, since the city now is going to get about $46 million for that purpose, District 5 Councilwoman Shirley Gonzales and others who support a long-term solution said some money should be earmarked to help developers build affordable housing.

The new money is a “game changer,” Gonzales said.

“We have resources now to do both rental assistance without losing momentum on affordable housing development,” Gonzales said. “In District 5, we need the type of community-based housing development that keeps families in decent living conditions in their own neighborhood while addressing the emergency need for renters to stay in place and landlords to remain financially afloat.”

Gonzales proposed taking $3 million of the $7.7 million and spending it instead on a program that helps create and rehabilitate affordable housing.

Her motion was successful, but split the council.

Six members, including Mayor Ron Nirenberg, voted for moving funds for the long-term goal. Five council members voted against the measure, including Treviño, District 6’s Melissa Cabello Havrda, District 7’s Ana Sandoval, District 8’s Manny Peláez and District 10’s Clayton Perry.

The city currently has $2.5 million available to help developers build affordable housing. Eight proposals came in requesting funding for a total of 750 additional housing units — totaling about $9 million for all projects. With Gonzales’ motion, the city now has $5.5 million for such projects.

“I am disappointed with the outcome of today’s vote that reduced the total amount of funds for the Emergency Housing Assistance Program,” said Treviño, who voted against the amendment. “This took money that was designated for (the program) and placed it into development.”

Another $2.6 million from CARES funding is going toward other affordable housing programs, such as rehabilitating seven older homes and repairing 13 homes.

About $ 1 million will pay for another 18 months of housing the homeless at a downtown hotel to help prevent the spread of COVID-19 among that population. Funds also will go toward 18 months of staffing for housing counseling, foreclosure prevention and eviction intervention.