Maybe you could try one of the extra-large wire crates? They give the dog a perfect view of what's going on around him so he might feel more comfortable in it than in an airline-type one. Mine is big enough for the dog to sit, stand, turn around and lay down with his legs stretched, so it is not physically restrictive.
I agree that restricting the dog's freedom when you are gone might help reinforce your dominance. But, basements are not the same as yards, basements are much more confined, so that is not a bad choice if crating is absolutely not an option.
Moving the dog's bed, if he has a regular bed, to your room at a level lower than your bed might also help. If he is sleeping on the couch by hiself in the living room, that is not helping.
In addition to Ed's basic obedience tape, which kicks ass, you might also read about "nothing in life is free," a set of steps for establishing rank - most of the steps you probably already know about, but it is interesting to read anyway and might mention something you haven't thought of. Do a google search on that phrase and you will find lots.
I have never been a fan of the wire crates. They are too open, hard to clean etc. A friend of mine had her dog badly dislocate his shoulder by putting his leg through some of the slats in the middle of the night to try and get at the cats. He was in such deep shock he never made a sound and they never knew anything was wrong until the morning. He spent eight weeks in a sling/harness and healed up OK but got a skin infection due to the lack of air circulation in the sling. All the hair in his leg fell out. He's fine now but it was a lot of $$$$ and stress.
I prefer the basement over a wire crate.
I remember my breeder telling me all those years ago when I asked her a question about whether I should use a crate. She said "Anyone who doesn't use a crate with a new dog or puppy is stupid." Although rather abrupt, she was a very intelligent woman with almost 30 years of dog experience. I figured she knew better then me. The crate was a godsend.
Ack! Thanks Caniche now I am scared to use something I spent $160 on. I'll check the size of space between the wire when I get home. I actually think they are much too small for paws, maybe your friend just had a poorly designed one?
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