The correct option is A The house is smaller
A complex sentence is made up of two or more clauses, where at least one
of them should be independent, i.e., complete in meaning. The other
clause/clauses should be dependent; it should depend on the
main/independent clause for its complete meaning.
The given sentence is a comparison sentence which contains one main clause. "The house is smaller" is the main clause, since it can stand as a sentence on its own; it does not require the other clause for its complete meaning. (Since it's a comparison sentence the clauses are more dependent on each other, and the comparative adjective 'small' is changed to "smaller" in relation to the clause that follows.) Hence option A is correct.
Option B contains a fragment of the main clause as well as the subordinate clause. It cannot form a clause of its own, hence B is incorrect.
Option C contains the subordinate/dependent clause; it cannot stand on its own as a sentence, hence it is incorrect.
Option D is incorrect because the answer lies in A.