one bedroom with 2 kids

Kay

so, my s/o and i are moving out on our own soon around july before the baby is due (we are roommates with his brother currently). we will have a 19 month old and soon to be newborn in july and s/o wants to get a one bedroom to cut down on costs and save a bit more money. i think its a bad idea, and we originally were going to look for a two bedroom so the kids could have a room. i think that the newborn and our other child will wake one another up, especially since our current 14 month old is somewhat of a light sleeper or takes awhile to fall asleep. my s/o thinks we should have her crib in the living room to sleep at night, but i dont want her out there alone. are there any people who are in the same position? do you think its a good or bad idea? pros and cons?