Those aren't city block polygons, they are a single polygon (the town boundary) with street centerlines over the top (streets shown with buffer and white symbology).
OSM Tiles:

Building and town polygons:

Plus buffered roads:

To get the "blocks" you want, you'll need to buffer to an appropriate distance (depending on type of road), use the difference tool to erase where the buffered roads are from the town polygon, then you may need to dissolve to remove the buildings (depending on the quick osm data you downloaded).