I know there are a variety of opinions on how helpful Erik's reforms have been - ranging from "You've killed the Duchies" to "The Duchies were dead, but so are the houses - Shireroth is dead" to "Houses = Political Parties" to "This is a great reform, I love it!" But I think we can all agree that what it has achieved is flexibility in both power and land. Personally, I think the flexibility in nobility is a great idea and has a lot more oomph in it; just that people haven't generally done too much stuff to merit it (hence it comes across as just taking away power and not giving it back).tl;dr version:
Claiming/Granting
Let the Kaiser and Landsraad grant land; and the Houses and Individuals be able to claim ungranted land. Kaiser > Landsraad > House > Individual - higher levels can revoke claims/grants of lower levels, and change their own claims/grants.
Land Organisation and Convention
Within a house, organise the land into Key House Land, subhouses for each individual (equivalent to Baronies), and 'spare' land. By convention, the Kaiser and Landsraad can take away spare land from a house if needed for others, and the house won't kick up a fuss. The Kaiser and Landsraad retain the power to take non-spare land away from a house; but by convention would not use that power without talking with the House first.
Hereditary/Non-Hereditary
Make it clear what happens to land when individuals die (either it stays in their house or it goes back to the Kaiser). If particular individuals are really good with land, you can grant them a lot of non-hereditary land, so their house loses it when they die. If a house dies, the land of course reverts to Imperial control.
However, the flexibility in land comes across to me as ... awkward. We can see that it's good not to have land nobody uses any more tied up forever; but we can also see that there is too much land in Imperial hands and none of us are quite sure how to get more. (For those wondering, yes, military action is part of Kildare's plan to claim more, but runs into the difficulty that Jonas and I are too busy; and my Shirithian time is now being taken up with the Landsraad.) So I have a proposal of how to keep flexibility in land and it's allocation; but to also allow historical land to be returned and new people to get involved with land.
Currently, land is granted by the Kaiser, and you can hold it in three levels:
Individual (non-hereditary) - You keep the land till you die; it follows you if you change houses; when you die, it reverts to Imperial land.
Individual (hereditary) - You have unambiguous control of this land within your house; when you die, it reverts to your House.
House (hereditary) - The House has this land; and may grant it to individuals within the house but it doesn't stay with them if they move houses. When the house dies, it reverts to Imperial Land.
Nobody may be in the Individual (hereditary) category yet, but it'll make sense why I've included it soon.
In my proposal, the Kaiser retains ultimate control of all land, as currently; but in practise others can claim and grant land too, and by convention, the Kaiser will not take land away if it is within certain categories.
Claiming/Granting
Land can be claimed/granted by the Kaiser, Landsraad, House or Individual; on a first-come first-served basis. Each level can change claims/grants of their level or below, but not of the level above. Within each level land can be held in one of the three above categories [Individual (non-hereditary); Individual (hereditary) and House (hereditary)] with the obvious exception that Individuals cannot claim land as House.
If the Kaiser grants land, the grant is irrevocable by anybody else; as currently. That includes that if the Kaiser grants land to an individual, their Head of House cannot take it away from them.
The Landsraad can grant any land not granted by the Kaiser. It can grant land to houses or to individuals. As before, if granted to individuals, their Head of House cannot take it away from them. The Landsraad can of course change the grants in the future.
A House can claim land that has not been granted by the Kaiser or Landsraad. In this case, they claim it as House (hereditary). Any land within a house that is House (hereditary), whether claimed or granted, can be given to individuals within the House by the Head of House, either as hereditary or non-hereditary to their sub-house (see below).
Finally, an individual can claim land that is not claimed by a House or granted by the Landsraad/Kaiser. If they are not in a house or their claim is not sanctioned by their house, another house can claim the land from them and take it away from them (House claims trump Individual claims). But another individual cannot claim the land off an Individual while that individual is still alive.
House Organisation
Within a House, land can be organised into sub-houses (which can either correspond to Individuals or the Minor Houses, depending on the size of the House). One sub-house will be Key House Land - land that is held by the house and is considered crucial to it and therefore granted to the head of house instead of to individuals. Any land that a house claims but does not consider that important is held outside any sub-houses, and can be claimed by individuals within the house for their sub-house.
In practical terms, this means that if a house holds land but doesn't give it to any subhouse, they don't care about the land too much. That sends the signal to the Kaiser/Landsraad that if others need to be granted the land, they can be and the house won't kick up a fuss too much. By convention, the Kaiser/Landsraad would not take land away that was granted to living subhouses; though they retain the theoretical power to do so.
Hopefully that wasn't too confusing - the overall thing is clear in my head but not easy to explain in general terms. Here's an example that will hopefully make it clearer.
An Extended Example
Take House Kildare, with two living citizens, Andreas and Jonas. Both Andreas and Jonas hold one county each (Melangia and Greater Audentior respectively) as Individual (non-hereditary) granted by the Kaiser. This means that technically, when they die, it reverts to Imperial Land, not their house; and it also means that Jonas, as Head of House, cannot take away Melangia from Andreas and give it to himself (or vice versa).
The Landsraad might agree to grant Kildare some other core lands - say Old Hallucination, Kitanus Fields, Blackrock and Nova Dalmacija. This means that other Houses cannot claim these lands. The Head of House might choose to grant Old Hallucination to the sub-house Atterock (corresponding to Andreas); and Blackrock to the sub-house Windsor (corresponding to Jonas). Kitanus Fields and Nova Dalmacija might then go into Key House Land. This signals to the Landsraad/Kaiser that these lands are considered valuable to Kildare.
House Kildare might then claim all the rest of the land on Apollonia. The Head of House might grant some land to each sub-house and leave some territories outside all that (say Automatica and Demesos).
Finally, Andreas as an individual might claim Illumination, but the Head of House doesn't sanction it so it's an individual claim.
If Andreas dies, Illumination would revert to Imperial Land. Let's say he also had Norfolk granted from the Head of House as Individual (non-hereditary). It would leave sub-house Atterock and go back to House Kildare in general. The rest of his land might be hereditary to the sub-house, and so his successor, New Citizen X, becomes head of Sub-House Atterock and gains control of those lands. New Citizen X might claim Illumination again.
Now House Elwynn decides they want Illumination. Since it's only an individual claim and they're a house, they can take it from New Citizen X (House trumps Individual). They might also want Norfolk, but because that's claimed by House Kildare already, they can't take it. They could negotiate a trade or start a war, but they can't unilaterally claim it. New Citizen Y comes along, and does some nifty stuff. The Landsraad might choose to give him some land, and sees that House Kildare has Norfolk just held in general. They take it away from House Kildare (Landsraad trumps House), and then grants it to New Citizen Y. Finally, the Kaiser might come along and decide that Kildare should keep Norfolk. So he takes it off New Citizen Y (Kaiser trumps Landsraad) and grants it to House Kildare as House (hereditary) land. The Landsraad wants to take it back, but they can't now, because the Kaiser has granted it and they can't stop the Kaiser's orders.
Summary
Basically then, I'd allow people to claim land and higher level claims/grants to trump lower levels. Some land would stay with houses/sub-houses when people die; some would revert back to the house; some back to the Kaiser. Land can still be taken off people - just by convention you only take the land they aren't using.
And if this all seems to complicated, you could just grant Kildare all of the land on Apollonia and we'll stop badgering for Land Reform.
EDIT: Inserted a tl;dr version, so it's more clear what parts are important and what parts are explained because they're a helpful convention but aren't essential.