GMAT Sentence Correction (SC) | Re: A 2009 study from the California State Housing Authority

Hiegmat mikemcgarry ,

Can anyone help me understand why is "which" wrong in option C? As posted above, Veritas prep solution says " In (C) the incorrect “which” clause would mean that all townhouses and “attached” homes are small and old". I don't quite understand this.

Also, I spent a lot of time figuring out what does that and which refer to? Do they refer to both townhomes and "attached homes" or just the "attached homes"? Pleas ehelp understand