One of the largest urban centers in the world, the Brazilian city of São Paulo is characterized by high levels of socio‐economic inequality and political polarization, significantly complicating issues of urban governance. Despite being designed to partially address these problems, São Paulo’s participatory budget (PB) was bounded by its urban context, institutional design and the relative strength of the political actors involved. The article analyzes a mechanism created within the PB to incorporate historically disadvantaged groups, or ‘socially vulnerable segments’, during the Workers’ Party administration of 2001–04. The segments methodology constitutes an intriguing example of how affirmative action can be used to improve decision‐making processes and address social exclusion in urban contexts. In particular, the segments served as a ‘counterpublic’ within the PB, helping activists representing the segments to develop strategies influencing the city’s urban and social policy.