Hello?

How can land use policy, that you point your finger at ("constraints on buiding more houses"), make it so that little houses on little lots commonly sell in the two million to three million dollar range?

Sorry, dude, you CANNOT get there in a city without a massive flood of money arriving from an external source. There is no way to get there based on the average salaries of local workers in the region.

Your proposed mechanism fails and your proposed solution fails.

Vancouver's major problem is massive demand from overseas money. A city of Vancouver's size CANNOT, based on local incomes, get to small house prices of two million and three million a pop. The prices get that high due to a massive external money source flooding the local market.