Populations in cities are projected to increase globally, densifying urban residential environments with both positive and negative effects. Positive social effects are offset by negative health effects however; urban residential noise has been identified in a large number of studies as a significant contributor to social unrest as well as a risk to physiological and psychological health caused by stress, making this topic highly relevant to the discussion on sustainability urban growth. Focusing on the psychological rebound effect of urban residential noise, this paper attempts to explain how and why auditory aspects of the spatial environment negatively influences urban residents. To provide context and to indicate areas in need of improvement, the legislative challenges to be faced are considered, with Sweden as a prime example of a first world country grappling with the effects of increased urban density. Existing building legislation regarding residential noise is considered in relation to studies investigating the effects of residential noise on psychological and physiological health, outlining areas in need of future development. Then, health responses to residential noise are placed in a broader evolutionary context by considering how these effects might be the result of triggered evolutionary mechanisms for keeping population size optimal. Further, the spatial dimension of hearing is discussed with reference to theories of territoriality in environmental psychology and the concept of auditory territoriality is described.