I don't think the emphasis here is on your house being close from someone happy. I believe it is on people who surround you. So if you are with happy people, then you are most likely to smile with them and have fun.
http://www.searchquotes.com/quotation/Happiness_is_contagiou...
In the western culture, people don't sit in their houses much or see their neighbors. It will be better to translate it as just focusing on people surrounding you.