Does anybody know how to reduce a cat's stress and/or break a bad habit?

My 12-year-old cat has been licking/pulling hair out on his front legs and belly for years now. After changing litter, food, trying Feliway, allergy shots, steroids and giving him more attention without results we've pinpointed it to stress. His entire life he lived with my sister and I, but as I moved out and got married a few years ago he was just living with my sister. My sister was not home much and that's about when he began pulling hair (we assumed loneliness). When she moved out and got married, she gave him to me and he seemed less stressed as I was home more but by then it had become a habit. I am now home often and he is given lots of attention and love but still does this. I do have a dog that he hated at first but now they are fine and even play together occasionally. As a result of the hair pulling he vomits up hairballs nearly everyday and I'm worried not only about the stress but the physical toll this has had on him (he used to be overweight but is now somewhat on the thin side). Does anyone know of any other options to break his habit or reduce whatever stress he may have?