The meaning should be clear if you change "houses" to "carries out" or "contains" the prefrontal cortex is the part of our brain that CONTAINS our higher cognitive functions.

A house that you live in houses you. Your neigbours' house houses them. The white box in your kitchen called a "fridge" houses the refrigerated goods. the prefrontal cortex is the part of our brain that houses our higher cognitive functions. The area of the brain called "the prefrontal cortex" is the part of the brain where the "higher cognitive functions" are found, done, kept, exist. . You will see that I disagree with Oscar's answer. Perhaps he just thought one answer but typed differently, as we all do sometimes. I agree with Flower's comment.

Kind of like “contains” like a house contains all of our belongings! Hope this helps. Andy

so if I rephrase it like this " prefrontal cortex is the part of our brain that does higher cognitive functions" would it be right?

In this case, "houses" means that it is where the prefrontal cortex is found / stored. I hope that makes sense!