Gosh KSM I wish it was easier.
About the older girl, it's easier, because only she is involved. I don't see how you can do anything to rescue her. In the expensive metro near me, people do routinely rent out the living room as a bedroom. My son is living there and his room is the living room. I don't see what your options are. To me, subsidizing her rent, would not be the best idea. That said, I believe the law in my area is written that if landlords can find a replacement tenant, the old tenant is allowed out of the lease.
As far as younger daughter goes, to me, that's somewhat different. While I can understand why she wants you to save her from this, being responsible to care for the baby 5 days a week, is giving you a full time job too. How do you feel about this?
I know my own grandmother had this kind of relationship with me. I cherish it. I think I would let my decision be based on what my needs and desires are, and try to not make it about your daughters needs and wishes.
I didn't have a relative to help me with my son, and I worked full time. While it was stressful, I found full-time childcare, but I had to pay.
Does your daughter have the funds to pay for childcare? If not, are there subsidies available through welfare? That's why they have that program for children and mothers. It used to be called, Aid For Dependent Children, AFDC, to financially (and otherwise) help mothers of children under 6 years old. Years ago, there were childcare subsidies available through this program, as well as vocational training.
To end, I would let my decision be based upon what I want for me.
