**2.4 Environmental psychology theory: enhancing sustainable living environments through real estate development**

Environmental Psychology Theory, which has evolved over the last four decades [26], investigates the intricate link between human behavior and the created surroundings, with a growing focus on topics relevant to sustainability. This approach emphasizes the psychological influence that design decisions have on the environment. This approach considers various factors, including the availability of natural elements, the presence of natural light, the presence of green areas, and, most importantly, the comprehensive integration of environmental characteristics both inside and outside the building [27]. This theory emphasizes the significance of developing sustainable living environments that consider hygrothermal comfort (the equilibrium of heat and moisture in the environment) [28], lighting comfort (the optimization of natural and artificial light for well-being) [24], acoustic comfort (the management of noise for mental and physical health) [29], and air quality (the guarantee of clean, breathable air) [30]. Microclimate ranges that are appropriate to improve the walkability of urban areas [31]. Mental health, productivity, and overall quality of life are all significantly impacted by these characteristics, which are crucial for the physical well-being of an individual.

It is essential to have effective microclimate management in urban areas to encourage walkability, which is an essential component of sustainable urban planning. Environmental conditions conducive to walking promote physical exercise and social connection, and they lessen the need for motorized transportation, which contributes to preserving the environment and the community's health. Outdoor places are made more pleasant and accessible by the design of urban spaces that consider microclimate features such as shade, wind protection, and temperature management [32]. This further enhances the livability of urban environments. Through these holistic concepts, real estate developers can create living spaces that are not only kind to the environment but also beneficial to the well-being of people. Biophilic design is a design approach that uses humans' inherent tendency to be drawn to the outdoors by incorporating elements of nature, such as indoor plants and green spaces. This technique improves mental well-being and encourages the development of sustainable habits [33]. It is vital to have large windows, skylights, and light wells to have daylighting, a fundamental component of lighting comfort. Its purpose is to enhance mood and cognitive function while simultaneously lowering energy consumption by minimizing the amount of artificial lighting required [34]. In addition, the development and maintenance of green spaces, such as parks and gardens, contribute to improving the management of temperature and moisture as well as decreasing noise. This helps

### *Sustainable Built Environment and Its Implications on Real Estate Development… DOI: http://dx.doi.org/10.5772/intechopen.114078*

preserve a wide variety of plant and animal species and reduces the effect of excessive heat in urban areas [35]. It also encourages people to participate in physical and social activities within the community. It is also essential to understand human interactions with the built environment regarding sustainable urban development strategies such as New Urbanism, Smart Growth, and Transit-Oriented Development [36]. These methods prioritize environmental sustainability, social equity, and the livability of communities, while also comprehensively considering issues of environmental comfort. The findings of Ekim et al. [29], a comprehensive literature study, highlight the necessity of understanding consumer interactions with energy-efficient solutions from a holistic perspective. This includes taking into consideration comfort components. This method allows a more thorough comprehension of the complexities of user actions and motivations. Additionally, implementing sustainable transportation choices such as bike lanes and pedestrian-friendly sidewalks, in addition to providing safe bike storage facilities, play a vital role in accomplishing wider goals connected to sustainability and improving the quality of life [37]. These features encourage travel sensitive to the environment and enhance the general quality of the outside environment in locations where people live. The Environmental Psychology Theory provides a solid basis for real estate developers by integrating psychological design principles with an in-depth understanding of the comfort levels of both the interior and outside environments. This technique makes it easier to create long-lasting habitats that impact both people and the planet, enhancing the quality of life, efficiency, and ecologically responsible behavior [38].

#### **2.5 Institutional and policy theories in sustainable real estate development**

Ohene, Eric, et al. contended that Net zero carbon buildings (NZCBs) possess significant potential as a viable approach to decarbonizing the built environment, combating climate change, and improving occupants' well-being. Conversely, insights from institutional and policy theories shed light on the regulatory frameworks, governance structures, and stakeholder engagement mechanisms that influence sustainable real estate development in the built environment [31]. The growth of real estate, which has significant repercussions on the environment, is the primary focus of efforts designed to promote sustainable development. According to the findings of Sahoo and Goswami's research, the primary goal of sustainable development is to fulfill the present generation's objectives without jeopardizing future generations' ability to meet their requirements [32]. Addressing sustainability issues requires understanding how institutions and policies shape sustainable real estate practices. Institutional and policy theories may explain how regulatory frameworks, governance structures, and stakeholder engagement mechanisms affect real estate development. Institutional theories explain how formal and informal rules, conventions, and values influence organizational and societal behavior and decisionmaking. Institutional approaches explore how regulatory frameworks, legal systems, and social norms affect sustainable real estate development. Institutional theorists stress property rights, land use restrictions, and planning strategies in steering developers toward sustainable building design, construction, and operation. These theories emphasize the role that institutional variable, such as government regulations, industry standards, and professional organizations, have in the behavior of real estate market participants. Policy theories investigate how acts taken by governments have an impact on society. Policy theories focus on examining the role of financial incentives, taxes, subsidies, and regulatory frameworks in fostering environmentally

responsible real estate development [33]. These theories evaluate market processes, regulatory tools, and stakeholder dynamics in sustainable real estate development. Governance arrangements, such as public-private partnerships and collaborative decision-making, can influence sustainable results in policy theories. Institutional and policy approaches study sustainable real estate practices. Institutional theories explain the social, cultural, and economic conditions of policymaking. They show how government agencies, industry groups, and professional organizations influence policymaking, implementation, and enforcement. On the other hand, policy theories examine how particular policy interventions promote sustainable real estate practices and contribute to institutional approaches. By integrating these views, researchers and practitioners may better understand sustainable real estate development variables. Sustainable real estate development and institutional and policy ideas have many ramifications.


This discipline should study how institutions, policies, and stakeholder networks affect sustainable real estate development. Empirical studies are required to assess the efficiency of certain policy tools and institutional configurations in promoting real estate sustainability.
