The correct option is B Are
The auxiliary verb 'be' has many forms. Depending on the person (first person, second, third) and the number (singular or plural), the form is used.
In the given sentence, "houses" is the subject. It is in the third person plural point of view. ("Mrs. Sudha's and Mrs. Shrestha's" is not the subject as it indicates possession, due to the apostrophes. It does not perform the action itself. Also, as these nouns do not own the same thing, each own a different house. So both will have an apostrophe attached.)
Option B: 'Are' is a form of the auxiliary verb 'be'. It is used when the number of the subject is plural. It means: to exist or live. Hence B is the correct option.
Option A: 'Is' is a form of 'be' used in the third person singular narrative. It is relevant to the given sentence, but the subject is in the plural narrative, hence A is incorrect.
Options C and D: The auxiliary 'has' means 'to possess or own'. For example, 'He has a blue car.' 'Have' is a form of 'has'; the former is used in the first person (singular as well as plural) and the third person plural. The latter (has) is used for the third person singular narrative.
These verbs do not agree with the sentence, as it does not focus on possession. The sentence focuses on the existence of the houses in the same building. Hence C and D are incorrect.