Urban regulations in Amman, Jordan, enforce uniform building setbacks irrespective of topography, exacerbating shading effects and compromising daylight access in residential areas—a critical factor for occupant health and psychological well-being. This study evaluates the interplay between standardized setbacks, slope variations (0–30%), and shadow patterns in Amman’s dense, mountainous urban fabric. Focusing on the Al Jubayhah district, a mixed-methods approach was used, combining field surveys, 3D modeling (Revit), and seasonal shadow simulations (March, September, December) to quantify daylight deprivation. The results reveal severe shading in winter (78.3% site coverage in December) and identify slope-dependent setbacks as a key determinant: for instance, a 15 m building on a 30% slope requires a 26.4 m rear setback to mitigate shadows, compared to 13.8 m on flat terrain. Over 39% of basements in the study area remain permanently shaded due to retaining walls, correlating with poor living conditions. The findings challenge Amman’s one-size-fits-all regulatory framework (Building Code No. 67, 1979), and we propose adaptive guidelines, including slope-adjusted setbacks, restricted basement usage, and optimized street orientation. This research underscores the urgency of context-sensitive urban policies in mountainous cities to balance developmental density with daylight equity, offering a replicable methodology for similar Mediterranean climates.