The "continuous change" hypothesis is quoted in contrast to federal government actions described in paragraph one, citing slowly evolving historical forces such as improvements in education as the reasons for improved earning potential as opposed to government intervention (lines 54-57). (E) is incorrect because it cites government action/ intervention as the reason for change, i.e. sanitation needs are met, whereas (D) describes the overall impact of evolving economic state consistent with the "continuous change" hypothesis. Note that the rest of the incorrect answer choices also cite some sort of government action - housing subsidy, grants, or tax incentives.
Let me know if this makes sense or if you have any other questions.