The shelter opened in August to give youth in Iqaluit a chance to get back on their feet after troubles with the law, or problems at home.
"There are a lot of young people who get thrown out by their family and end up sleeping on their friend's couch," said Josh Teemotee, executive director the Illitiit Society.
"There's a large population of youth in Iqaluit who have been in trouble with the law and who are homeless."
The Illitiit Society received $211,000 in funding from the city via the Human Resources Development Council.
The funding was insufficient to meet the needs of youth in Iqaluit, Teemotee said.
The house has a staff of nine and room for five youths at a time. More than a dozen youths have been turned away from the facility since August. Since the cottage is a "pilot project" staff will see how it goes this year.
They assist youths trying to get jobs, or furthering their education while giving them a safe place to sleep.
"We don't want them just staying in the home all day long," said Teemotee.
He is disappointed with the lack of support homeless youth get from all levels of government.
"They are more than happy to refer young people to us," Teemotee said.