Affordable Housing Faster
Functional Housing uses master leasing to make existing apartment buildings affordable. We lease a building — guaranteeing occupancy and income for the owner — and then rent units at affordable rates. We also partner with local organizations to support the people who move in.
Master Leasing, Explained
Construction can take years, but communities need more affordable housing right now. Master leasing is our solution for increasing affordable housing stock at a fraction of the cost and time required for traditional development.
In a master lease, Functional Housing signs a reduced-rate, multi-year lease on an entire building, then we rent the units at below-market rates. Owners and developers get guaranteed income without vacancy risk, and we take care of day-to-day building management. Our residents get affordable rates, quality homes, and support from nonprofit partners who can help them earn more, save more, and plan for the future.
A master lease is one lease on a whole building. Instead of signing multiple leases with multiple residents, owners can sign just one lease with us. We handle the rest.
One Building · One Lease · Affordable Homes
How a $2,000 Apartment Rents for $850
Our rents don't come from cutting corners. They come from stacking two sources of savings: a negotiated master lease that lowers the cost of the unit, and grant funding that closes the rest of the gap.
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1
Start at market rate
$2,000/month is what the apartment would rent for on the open market.
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2
Negotiate the master lease
Because we lease the whole building and take vacancy risk off the owner's books, we secure a reduced rate of $1,700/month. Owners trade a modest discount for guaranteed, multi-year income.
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3
Close the gap with grants
Grant funding covers $850/month of the remaining cost, so the resident pays just $850/month.
Why it matters: because the master lease lowers the base cost first, every grant dollar goes further. In this example, $850 in grant funding cuts the resident's rent by $1,150 — about 35% more impact than the same subsidy applied to a market-rate unit.
Proving a Model, Not Just Filling Buildings
Functional Housing exists to prove a model, not just to fill buildings. As our pilot partnerships come online, we're measuring the value we create for residents — and the case for master leasing as an affordable housing strategy — in three ways.
Combining master lease savings with grant funding lets us offer rents as low as $650–850 a month, with multi-year guarantees. That stability means residents can stay anchored in their community and focus on building skills and saving for the future. A mix of affordable and market-rate units in each building helps ensure we can meet our financial obligations to both owners and residents.
We also believe in creating affordable housing that sets the conditions for people to be successful in life. Every Functional Housing lease will incorporate wraparound support resources, facilitated in collaboration with partner organizations, for all residents. We measure social impact in the percentage of residents who double their income and/or prequalify for homeownership.