Sorry I'm late getting back to you on this...I'm in the middle of a nasty bout of what feels like the flu. Please excuse this if it seems a little rambling, fever makes me write weird
A question about assumptions:
It appears that the overall social structure is a family/clan arrangement (especially with the houses). Within your story, does that break down among the people that live in the cities?
To a large extent it does....approximately 50%-60% of the urban population are active members of one House or another. Most of the rest have had, at very least, one member of of a House within their recent ancestors.
Even though the cities seem to be run by the various houses (with a few exceptions), cities of and by themselves tend to stretch family/clan loyalties. Have you given any thought as to the degree this may be happening - if it is at all?
One of the things that has happened over the last 100 years or so is the rise of a Municipitality government (something akin to what we have, aka a Mayoral office and town council. It came about because of the citizens desire to have more self determination, and more of a say so in local affairs.
Some cities threw the Houses out of power (aka the Unaffiliated Territories), other city states have allowed a parliamentary body to be formed.
Urban life has definitely changed things...many people think that the Houses are irrelevant now, and should be treated more a figure heads or "historical curiosities".
One of the things that has been a point of contention right now is one law that is written into the Municipitality laws nearly everywhere: "The Head of House may not be challenged in time of war." The full text of it has been interpreted to mean that when war comes to the land...the Houses have complete authority.
During the big war with Bellisarius that took place 16 years or so ago, many people became very dissatisfied with the amount of authority the Houses had over things and The Seperatist movement came about as a result of it.