The hotly contested election has spurred national attention, drawing comment from the White House and the state's top officials. Largely conservative opponents of the law allege that it would allow men dressed as women, including sexual predators, to enter women's restrooms. Supporters of the law, including Mayor Annise Parker, argue that it extends an important local recourse for a range of protected classes to respond to discrimination.

Supporters released a written statement Tuesday night: "We are disappointed with today's outcome, but our work to secure nondiscrimination protections for all hard-working Houstonians will continue. No one should have to live with the specter of discrimination hanging over them. Everyone should have the freedom to work hard, earn a decent living and provide for themselves and their families."

The ordinance bans discrimination based not just on gender identity and sexual orientation, but also 13 classes already protected under federal law: sex, race, color, ethnicity, national origin, age, religion, disability, pregnancy and genetic information, as well as family, marital or military status.