Happiness appears to be a redevelopment of the old BGS "happiness" score, from the times people have had non-zero values so far.
So having built some places for people to live, you then need to carry out some trading, hand in exploration data, run some missions (and if non-Anarchy, do some bounty hunting) to generate positive BGS states like Boom or Civil Liberty.
Things like "wealth" and "standard of living" adjust the state of the Economy state slider for the factions, which make these states harder or easier to achieve, but they won't occur in the absence of player activity. (In theory, if you managed to colonise a system which was really popular with other players, those players' activity might sustainably create these states for you)