"have been" usually refers to something that has happened over and over, not something that happened once. "Donald Trump has been sued many times" versus "Donald Trump was sued by John Smith in 1999" The houses were built once, so they "were built." If they had been burned down and rebult several times, they "have been rebuilt."

The construction with "have been" refers to things which happened at some unspecified point in the past. Because you're explicitly stating the time here, you need to use the simple past - "When were they built"?

why the second one isn't correct?

The first one is correct, 'when were they built?'

"When were they built?" is good.