The "Filtering Model" of Housing Markets Is Based on What

The "filtering model" of housing markets is based on what principle?

A) Housing quality rises and falls in regular cycles.
B) Zoning ordinances evens out differences in housing quality.
C) Gentrification evens out differences in housing quality.
D) There is an increase in the quality of a house over time.
E) There is a decrease in quality of a house over time.