A society can develop different kinds of traditions, including a tradition related to seafaring. Thus the figure of the old sailor, with pipe in mouth, long white beard and bonnet, telling stories in the corner of the local pub, becomes a mythical figure which agitates the fantasy of young people, making them see adventures in far-off lands, contacts with exotic people and cultures...and, of course, riches to be earned. Thus, each maritime building in a city evokes these naval traditions and increases happiness in the city.
This Policy is particularly useful if you have Happiness problems. It potentially adds +3 Happiness per coastal city (after you build all three maritime buildings) - not a small benefit. Of course, the more coastal cities you have, the greater the benefit of this Policy.
You should consider which of the two level 1 Policies in the tree to adopt first: this one or Maritime Infrastructure. They both have great bonuses, but the other one's bonus is maybe a bit more practical.
Nations with strong naval traditions value their country's navy above all other branches of the military. (For obvious reasons: they're often island nations.) Service in the navy is expected of the ruling class, and naval officers are seen as superior to officers of the army or air force. Great Britain has the longest and strongest naval tradition in Europe. The British ships were known to be superior to other nations' vessels, and the British officers and crew were the best on the water. This gave the British Navy a serious edge in morale in naval warfare.