They are both very good films. In The Heights has excellent music, some great characters and some really unique set pieces to bolster a sort of mediocre story.

West Side Story also has excellent music, great characters and unique set pieces but the story is stronger and the cinematography is amazing.

So West Side Story is probably "better" but they are both really great. I would also recommend Tick, Tick .... Boom!, another musical from last year that I actually think is better than both of the other two. Andrew Garfield is absolutely amazing in it. It's the directorial debut of Lin Manuel Miranda and it is excellently done.